Guest Posted August 18, 1999 Posted August 18, 1999 A C corporation that maintains a qualified profit sharing/401(k) plan converts to an S corporation. Loans of the participant/owners are not repaid. Two years go by. What are the corrective measures? Are the loans taxable distributions at the time of the conversion? Is there also a prohibited transaction tax due? Is this an issue for VCR? All comments welcome.
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