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Dividends paid on unallocated shares which are not used to repay an associated exempt loan may be allocated as provided in the plan, subect to other qualification rules. Rev. Rul 80-155 would appear to indicate that such earnings would need to be allocated to participant accounts if not used to repay the loan or passed through to participants. Has anyone had this issue come up and, if so, did you arrive at the same conclusion? A related question is whether the dividend paid on unallocated shares that's allocated to participant accounts (however the plan provides) is considered an employer contribution and annual addition for purposes of 415, or an allocation of trust investment earnings that does not result in an annual addition.
