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close of the taxable year of the trust which ends with or within
the employee's taxable year. The term "highly compensated
employee" is defined to include "any employee who, during the
year or the preceding year--(A) was at any time a 5-percent
owner". Sec. 414(q)(1)(A). An employee is treated as a 5-
percent owner if he or she was a 5-percent owner as defined in
section 416(i)(1). Under section 416(i)(1)(B), if the employer
is a corporation, a 5-percent owner means "any person who owns
(or is considered as owning within the meaning of section 318)
more than 5 percent of the outstanding stock of the corporation".
Since Gant was the 100-percent shareholder of Products from 1981
through 1994, he was a highly compensated employee for purposes
of the taxable years at issue.
The House conference report to accompany the Tax Reform Act
of 1986, Pub. L. 99-514, 100 Stat. 2085, as a part of which
section 402(b)(2) was enacted, states that "Highly compensated
employees * * * are taxable on the value of their vested accrued
benefit attributable to employer contributions and income on any
contributions to the extent such amounts have not previously been
taxed to the employee." H. Conf. Rept. 99-841, at II-416 to II-
417 (1986), 1986-3 C.B. (Vol. 4), 416-417. The parties
stipulated that as of June 30, 1991, Gant had a benefit under the
Pension Plan of "at least" $353,762, and an account balance in
the Profit Sharing Plan of $353,688, for a total benefit under
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