Excise tax on prohibited transactions

[Gary]

Say a plan sponsor makes a PT of $100,000 to the corporation on 7/1/04 (calendar year plan year/tax year).

Say the corporation pays the plan the $100,000 on 12/31/2005.

Is the PT for 2004 = .15 * 100,000 * 1/2 = 7,500?

And the PT for 2005 = .15*100,000 = 15,000?

Or would it be based on just the use of the money, thus using some rate of interest like 1% per month, resulting in a PT for 2004 of:

.15*.01*100,000*6 (6 months in 2004) = $750 for 2004

And $1,500 for 2005 since for 12 months?

Or lastly, perhaps it is based on the first set of calculations until the plan is reimbursed and then it is recalculated based on the second set of calculations?

Any knowledge out there on this calculation?

The Pension Answer Book was somewhat misleading to me on this.

[QDROphile]

The nature of the transaction is important. Loans are treated differently than sales. If you want more specific help, you will have to describe the PT and the correction in greater detail. Form 5330 is of some help.

[Gary]

In a specific situation the plan loaned the money in cash directly to the corporation. It has not yet been corrected (i.e. reimbursed by the corp.)