- 5 - Revenue Code; and (6) total loans to any one participant must be limited to the lesser of $50,000, with some adjustment for outstanding balance of loans, or one-half of a participant's or beneficiary's vested account balance.3 Failure to make payments when due under the terms of the loan agreement would result in a default, whereby the trustee had the authority to collect the balance of the loan through any reasonable action that included instituting a lawsuit, foreclosing on any security, or recharacterizing the loan as a deemed distribution. As participants in the Plan, petitioners entered into a series of transactions with the Plan. During 1992, Brian received $207,300 from the Plan.4 The following promissory notes were prepared to evidence the transfers of the underlying amounts: Date on Note Amount of Note 01/31/92 $110,000 02/28/92 26,000 03/31/92 6,000 04/30/92 2,000 05/31/92 10,000 06/30/92 2,000 07/31/92 31,000 08/31/92 10,000 2(...continued) loan was used to acquire a participant's principal residence. 3 These requirements were intended to incorporate the loan requirements embodied in sec. 72(p)(2)(A), (B), and (C). 4 At that time, Brian had not attained either retirement age under the Plan or the age of 59-1/2. See sec. 72(t)(2).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011