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It said that the proffered distinction made no economic sense: if an employer made a contribution of unencumbered, noncash property in a year prior to the year in which its minimum funding obligation arose, it would not run afoul of the prohibited transaction rules, whereas a violation would occur if the employer made the identical contribution a year later.
Conversely, a transfer of unencumbered property to a welfare benefit plan that does not relieve the employer or sponsor of any present or future obligation to make a contribution measured in terms of cash amounts would not constitute a prohibited transaction.
4975(f)(3) to mean that voluntary contributions of property will be prohibited transactions if the plan assumes any liens on the contributed property, while voluntary contributions of unencumbered property will not be a prohibited transaction.
This seems to indicate that contributions of unencumbered property to profit-sharing plans, stock bonus plans and other defined contribution plans not subject to the Sec.
1992), aff'g TC Memo 1990-628, that a contribution of unencumbered property by an employer to a defined benefit pension plan in satisfaction of the employer's minimum funding obligation constituted a prohibited sale or exchange under Sec.
5/25/93, the Supreme Court ruled in an 8-to-1 decision that a transfer of unencumbered property by a qualified plan sponsor to the plan in order to satisfy its funding obligation gave rise to a prohibited transaction under Sec.