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409A DIY

 

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This document includes a general discussion of IRC 409A, published by Heller Ehrman in November 2005. It is unique in that it includes a template for the Do-It-Yourselfer that appears to comply with the Illiquid Startup Method described in the Code. See page 8 and beyond for the template.

Unfortunately, with the collision between 409A and 123R (IRS and SEC), this template has become fairly useless in our view. Our hats are off to Heller for giving startups a way to comply with 409A during the early days. If it weren’t for the complications presented by Fair Value accounting, this would have remained a nice, usable DIY template.

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