Land in profit sharing plan sold

[Pixie]

My client is selling a piece of land they have held in their 401k pooled account. Does excise tax on the sale apply?

[J Simmons]

You might have unrelated business taxable income if too much development activity took place while held by the plan, and it cannot be shown that all of that development activity was necessary to allow the plan to liquidate the investment in face of a liquidity problem of the plan.