Guest frosty Posted May 20, 2010 Posted May 20, 2010 Have a participant that has a primary residence third party loan. They want to borrow $50,000 from the plan so they can refinance the third party loan from the bank. They will not be withdrawing additional cash when they refinance with the bank. Can the loan from the plan be amortized over 5+ years? Looked in the regs and it's a little unclear.
masteff Posted May 20, 2010 Posted May 20, 2010 IRC 72(p) "(ii) Exception for home loans Clause (i) shall not apply to any loan used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the participant." Emphasize: used to acquire Refi of house is not acquisition so can't be amortized greater than 5 years. Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
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