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a “prohibited transaction” under section 4975(c)(1)(B), (D), and
(E), and none of these loans is exempted from that definition by
section 4975(d). Under section 4975(c)(1)(B), the plan’s lending
of money to petitioner or to Inland was a “direct or indirect * *
* lending of money * * * between a plan and a disqualified
person”. Under section 4975(c)(1)(D), each of the three loans
also was a “direct or indirect * * * transfer to, or use by or
for the benefit of, a disqualified person of the income or assets
of a plan”.3 See O’Malley v. Commissioner, 96 T.C. 644, 651-652
(1991), affd. 972 F.2d 150 (7th Cir. 1992). Under section
4975(c)(1)(E), each of the three loans also was a direct or
indirect “act by a disqualified person who is a fiduciary whereby
he deals with the income or assets of a plan in his own interest
or for his own account”. Cf. Greenlee v. Commissioner, T.C.
Memo. 1996-378; Gilliam v. Edwards, 492 F. Supp. 1255, 1263
(D.N.J. 1980).
Petitioner aims to avoid an application of section 4975(a)
by advancing his five assertions set forth above. Petitioner’s
reliance on these assertions is misplaced. First, petitioner
asserts incorrectly that because each of the three loans was
3 Specifically, the three loans benefited petitioner in that
he used the first loan to pay the payroll of his wholly owned
corporation Aspects, he caused the second loan to pay his
personal car payment, and he caused the third loan to pay the
mortgage and payroll taxes on the building owned by a second
wholly owned corporation, Inland.
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