nonallocation period

(3) Definitions and special rules For purposes of this subsection— (A) Lineal descendants Paragraph (1)(A)(ii) shall not apply to any individual if— (i) such individual is a lineal descendant of the taxpayer, and (ii) the aggregate amount allocated to the benefit of all such lineal descendants during the nonallocation period does not exceed more than 5 percent of the employer securities (or amounts allocated in lieu thereof) held by the plan which are attributable to a sale to the plan by any person related to such descendants (within the meaning of section 267(c)(4) ) in a transaction to which section 1042 applied. (B) 25-percent shareholders A person shall be treated as failing to meet the stock ownership limitation under paragraph (1)(B) if such person fails such limitation— (i) at any time during the 1-year period ending on the date of sale of qualified securities to the plan or cooperative, or (ii) on the date as of which qualified securities are allocated to participants in the plan or cooperative. (C) Nonallocation period The term “nonallocation period” means the period beginning on the date of the sale of the qualified securities and ending on the later of— (i) the date which is 10 years after the date of sale, or (ii) the date of the plan allocation attributable to the final payment of acquisition indebtedness incurred in connection with such sale.


26 USC § 409(n)(3)

Scoping language

For purposes of this subsection
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