Juan Falso

Sorry Bill, I never intended to give the impression of being upset. No emotional layer at all. I just like a good discussion and I despise badly written regulations. I learned to fly for fun and the mentality of pilots at the airport is completely different. They will pick apart the regulations context and verse to the most infinite degree because that is how the FAA enforces. IRS says "we know what we wrote, but here is what we meant".. Of course going to bat against the FAA might get a license suspended for a few month whereas the DOL or IRS will just take your nest egg.

Business Days Workdays (does not include weekends or holidays) Calendar days Actual number of days including holidays and weekends **Above are the only definitions of "DAY" in the IRS terms and definition chapter. **Below is from Collins Dictionary of Law © W.J. Stewart, 2006 DAY. A division of time. It is natural, and then it consists of twenty-four hours, or the space of time which elapses while theearth makes a complete revolution on its axis; or artificial, which contains the time, from the rising until the setting of the sun,and a short time before rising and after setting. Vide Night; and Co. Lit. 135, a. 2. Days are sometimes calculated exclusively, as when an act required that an appeal should be made within twenty daysafter a decision. 3 Penna. 200; 3 B. & A. 581; 15 Serg. & Rawle, 43. In general, if a thing is to be done within such a timeafter such a fact, the day of the fact shall be taken inclusively. Hob. 139; Doug. 463; 3 T. R. 623; Com. Dig. Temps, A; 3 East,407. 3. The law, generally, rejects fractions of days, but in some cases it takes notice of such parts. 2 B. & A. 586. Vide Date. 4. By the custom of some places, the word day's is understood to be working days, and not including Sundays. 3 Espin.N. P. C. 121. Vide, generally, 2 Chit. Bl. 141, note 3; 1 Chit. Pr. 774, 775; 3 Chit. Pr. 110; Lill. Reg. h. t; 1 Rop. Leg. 518; 15Vin. Ab. 554; Dig. 33, 1, 2; Dig. 50, 16, 2, 1; Id. 2, 12, 8; and articles Hour; Month; Year. *** What is governing, an example or the code as written? I would wager that the court records have at least a few cases where the example was followed but the individual was cited for not following the actual code.

The quirks are interesting. If perpetual loans are what is being discouraged then why is it one can borrow $25,000 pay it off after a year and borrow 25,000 again pay it off...etc.? Once perpetuity is off the table the rule becomes a fancy way of saying don't let your combined loans go over $50k or 50%.

Source of text cited is: https://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleA-chap1-subchapB-partII-sec72.pdf Perpetual loans would imply never repaying the loan. In the cited example the loan is repaid in full indicating a certain level of liquidity. To the extent that you are paying an appropriate interest rate what is the concern? it is like any other investment. One might argue that this could be a good strategy for earning a better return on cash reserves than say a regular money market acct. I could use money from the same account to by a mcdonalds franchise, work there and never pay it off. So is the intent really to stop one from perpetual use of the funds or is this just a long confusing way to say that your combined loans cant exceed $50,000?

I have a brief question concerning 401K loans. Account has over well 100,000 in value. Employee takes out loan . Employee takes 12 month leave of absence. At X % the loan amount increases to 49,000. upon his return the employee, on the same day, pays off the balance and takes out a new loan. Seems as though there are two steps: Determine the allowable amount of loan and Ensure that the loan, upon issuance, does not exceed allowable amount. USING THE FOLLOWING: (i) $50,000, reduced by the excess (if any) of— (I) the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over (II) the outstanding balance of loans from the plan on the date on which such loan was made, or (ii) the greater of (I) one-half of the present value of the non-forfeitable accrued benefit of the employee under the plan, or (II) $10,000. 50,000- (49,000-49,000)=50,000 I guess that you could argue that the outstanding balance at any point during the day was either the 49,000 or the new loan amount of 50,000.. but never both. Or , the 49,000 on the day of the loan plus the 50,000 of the new loan: 50,000-(49,000-99,000)= 100,000, which is then limited to 50,000. Alternatively, if the loan was paid off the day before, you could argue that upon issuance of the loan the outstanding balance for the day is 50,000 Resulting in 50,000-(49,000-50,000) = 51,000 which is then limited to 50,000. I guess my point is there seems to be no reference as to timing or time of day. Once issued a loan balance is "outstanding". So really the limit is that the combined amount is 50k. As for step two, knowing the first loan is paid, allows for the issuance of the second loan. Let the comments begin.