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Revised
Year Deficiency Sec. 6662 Penalty
1990 $9,603 $1,921
1991 22,648 4,530
Respondent computed the amount of the revised
deficiency for 1990 by treating the principal amount of
each of the loans that petitioner received in 1990 as a
taxable distribution of plan assets in that year (viz
$24,000, as shown in the following schedule). In addition,
respondent treated the aggregate unpaid interest that
accrued during 1990 on all of the outstanding loans,
except the 1986 loans, as a distribution during 1990 (viz
$5,100.82, as shown in the following schedule). This
amount includes interest that accrued during 1990 on the
loans made in 1987 and 1988 that the parties agree are
deemed distributions prior to 1990. Respondent calculated
the aggregate deemed distribution for 1990, $29,100.82, as
follows:
Loan Balance as ofBalance as of1990 AccruedTotal
Date Principal1990 Loans12/31/89 12/31/90 Interest Distribution
2/03/86$15,000.00
5/01/8612,000.00
8/15/8611,760.00
1/15/8710,000.00 $13,120.87$14,482.98$1,362.11
2/15/874,000.00 5,248.35 5,793.19 544.84
2/15/8810,000.00 11,886.86 13,120.87 1,234.01
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Last modified: May 25, 2011