Paricipant loan for a deceased participant

[Guest BrianF]

In a string starting in early Dec 1999 titled,"Loan default due to death of participant - who is liable for the taxes?", the view was that the beneficiary would be liable for the loan as an offset amount. I have a non-spousal beneficiary who will leave the money in the plan as long as possible. However, our recordkeeping process is to deem a loan if payments are not made for 90 days. How would I handle the loan after 90 days, would it be a deemed loan or an offset payment? If the loan is taxable income with the tax year for the participant, what category would be used on the 1099r. All help is greatly appreciated.

[Guest Bob Collins]

Will the plan administrator allow the beneficiary to disclaim the death benefit to the extent of the loan? A partial disclaimer?? If yes and all beneficiaries disclaim the loan, the defaulted loan may be taxable to the estate of the dead participant, not the beneficiary(ies). Check with a local attorney on this concept.