Loans in merged plan

[Guest Sieve]

Participant A borrows $40,000 from a MPPP (when A's account balalnce is $150,000). Participant A then borrows $30,000 from the same employer's PSP (when A's account balance is $250,000).

The MPPP is then merged into the PSP, and the MPPP trustees assign A's $40,000 note to the trustees of the PSP (who accept the assignment). Does the combined $70,000 worth of loans now in the PSP violate the $50,000 loan limitation of IRC Section 72(p)(2)(A)?

[Belgarath]

It already violated it before the merger. The plans should have been aggregated for purposes of calculating the loan limit,

[Guest Sieve]

No wonder I've never had this question arise before! You're right: IRC Section 72(p)(2)(D)(ii).

THANKS!