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Which of the following statements about stock bonus plans is false? a. A CODA can be...

Which of the following statements about stock bonus plans is false?

a. A CODA can be attached to a stock bonus plan.

b. Participants of a stock bonus plan must have the right to demand employer securities on plan distributions.

c. Stock bonus plans have a deductible contribution limit of 25 percent of compensation.

d. None of the above are false. All are true.

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Answer #1

All of them are true.

Stock bonus plans are the plans in which contributions of company stock are done by employers. In stock bonus plan benefits are distributed in the form of stock. These plans are not compulsory but it should not be discriminated toward highly compensated employees like executive s. Contribution of employer is not based on profit.

A CODA means CASH OR DEFERRED ARRANGEMENT. Through this method profit is shared or stock bonus is funded. Participants of a stock bonus plan must have the right to demand employer securities on plan distributions unless the company is an S organization or has bylaws requiring that all. It is deductible up to 25%.

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