IRC 409(p) Prohibited Allocations of Securities in an S Corporation

T.D. 9302 - Prohibited Allocations of Securities in an S Corporation (IRC Section 409(p) Final Regulations)
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Final regulations under section 409(p) of the Code provide guidance concerning requirements for employee stock ownership plans (ESOPs) holding stock of Subchapter S corporations.

IRC Section 409(p) Timeline

Final Regulations (2006) – Final Regulations were issued on December 16, 2006 and generally applicable with respect to plan years beginning on or after January 1, 2006.

Proposed and Temporary Regulations (2004) – Proposed and Temporary Regulations were issued December 16, 2004 and are generally effective for plan years beginning on or after January 1, 2005.

Proposed and Temporary Regulations (2003) – Proposed and Temporary Regulations were issued July 21, 2003 and are generally applicable with plan years ending after October 20, 2003.

Internal Revenue Code Section 409(p) (2001) – Section 409(p) was added to the code in 2001. For S corporation ESOPs in existence on March 14, 2001, section 409(p) is effective for plan years beginning after December 31, 2004.

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