over mortgaged property 1 man plan

[SheilaD]

I have a take over 1 man plan whose sole investment is a piece of property with a mortgage that exceeds the current appraisal of that property. We took over the plan in 2009 and the mortgage was not mentioned. He just let it slip this time around.

I believe that rental income goes to pay down the mortgage. The owner participant is 69, disabled and seems to have trouble understanding what I am saying. I feel sorry for him and would like to help if possible. (How do I get into these situations?). I'm wondering if there is a way I can fix this for him by distributing the investment property to him with the mortgage. The net value is negative so there would not be a taxable event. I don't know what else we can do for him.

Of course I would send him a letter and ask him to sign off on it that we essentially did not create or advise him to create this situation and that we recommend he discuss the situation with an ERISA attorney before he proceeds.

Any thoughts?

[SheilaD]

Nevermind -- confused client called this morning the plan asset is not mortgaged - he is confused - the mortgage is on HIS house not the plan investment property. Sorry to waste time.