- 12 -
the general rule of section 72(p)(1) if the following
requirements are satisfied: (1) The balance of all outstanding
5(...continued)
during the 1-year period ending on
the day before the date on which
such loan was made, over
(II) the outstanding balance
of loans from the plan on the date
on which such loan was made, or
(ii) the greater of (I) one-half of the
present value of the nonforfeitable accrued
benefit of the employee under the plan, or
(II) $10,000.
* * * * * * *
(B) Requirement That Loan be Repayable within 5
years.--
(i) In General.-- Subparagraph (A) shall
not apply to any loan unless such loan, by
its terms, is required to be repaid within 5
years.
* * * * * * *
(C) Requirement of Level Amortization.--Except as
provided in regulations, this paragraph shall not apply
to any loan unless substantially level amortization of
such loan (with payments not less frequently than
quarterly) is required over the term of the loan.
Sec. 72(p)(2)(A)(i) was amended by Tax Reform Act of 1986,
Pub. L. 99-514, sec. 1134(a), 100 Stat. 2085, 2483-2484.
Prior to the amendment, the statutory limit of $50,000 in section
sec. 72(p)(2)(A)(i) was not reduced by the excess, if any, of the
highest outstanding loan balance during the 1-year period ending
on the day before the date of the new loan, over the outstanding
balance of loans from the plan on the date on which the loan was
made. This revision to sec. 72(p)(2)(A)(i) applies to loans
made, renewed, renegotiated, modified, or extended after Dec. 31,
1986. Id.
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011