- 11 -
III. Loan of $7,089.95
A. General
Section 402(a) provides that distributions from qualified
plans are taxable to the distributee in the taxable year in which
the distribution occurs, pursuant to the provisions of section
72. Section 72(p)(1)(A) treats certain loans from a qualified
employer plan to a participant or beneficiary as taxable
distributions. See generally Plotkin v. Commissioner, T.C. Memo.
2001-71; Patrick v. Commissioner, T.C. Memo. 1998-30, affd. per
curiam without published opinion 181 F.3d 103 (6th Cir. 1999);
Prince v. Commissioner, T.C. Memo. 1997-324; Estate of Gray v.
Commissioner, T.C. Memo. 1995-421. A “qualified employer plan”
includes a plan described in section 401(a) that includes a trust
exempt from tax under section 501(a). Petitioner’s section
401(k) plan is a qualified employer plan. See sec.
72(p)(4)(A)(i)(I).
Section 72(p)(1)(A) provides that if a participant or
beneficiary receives, directly or indirectly, any amount as a
loan from a qualified employer plan, then that amount shall be
treated as having been received by the individual as a
distribution under the plan. A loan from a qualified employer
plan gives rise to a deemed distribution that is taxable in the
year in which the loan is received. Id.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011