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mortgage or similar lien which the plan assumes or if
it is subject to a mortgage or similar lien which a
disqualified person placed on the property within the
10-year period ending on the date of the transfer.
(4) Amount involved.--The term "amount
involved" means, with respect to a prohibited
transaction, the greater of the amount of money and
the fair market value of the other property given or
the amount of money and the fair market value of the
other property received; * * * For purposes of the
preceding sentence, the fair market value—-
(A) in the case of the tax imposed by
subsection (a), shall be determined as of
the date on which the prohibited
transaction occurs; and
(B) in the case of the tax imposed by
subsection (b), shall be the highest fair
market value during the taxable period.
(5) Correction.--The terms "correction" and
"correct" mean, with respect to a prohibited
transaction, undoing the transaction to the extent
possible, but in any case placing the plan in a
financial position not worse than that in which it
would be if the disqualified person were acting under
the highest fiduciary standards.
Section 4975 was added to the Code in 1974 by the Employee
Retirement Income Security Act of 1974 (ERISA), Pub. L. 93-406,
sec. 2003(a), 88 Stat. 829, 971. See also Commissioner v.
Keystone Consol. Indus., Inc., 508 U.S. at 160 (section
4975(c)(1)(A) contains "broad language"). The Congress enacted
section 4975 to effectuate its intent to tax disqualified
persons who engage in self-dealing rather than innocent
employees who were previously faced with plan disqualification
on account of a prohibited transaction. S. Rept. 93-383, at
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Last modified: May 25, 2011