austin3515 Posted March 3, 2015 Posted March 3, 2015 (don;t worry about the future dates, just making an example). Participant A terminates on 3/3/2015 with a loan balance of $5,000. Participant is not eligible for a distribution from the Plan until after the end of the plan year (I..e, not until January 2016. Participant is rehired in December 2015, after the loan is defaulted, but before he is eligible for a distribution. Has there been a loan offset? Austin Powers, CPA, QPA, ERPA
Lou S. Posted March 3, 2015 Posted March 3, 2015 I would say because they were terminated there was a distributable event (separation from service) and you have an offset rather than a default.
Bird Posted March 3, 2015 Posted March 3, 2015 I'd call it a default. The distributable event would be termination of employment and the passing of Dec 31 without re-employment. That did not happen. Ed Snyder
austin3515 Posted March 3, 2015 Author Posted March 3, 2015 EOB says look tot he promissory note, and that's exactly what the promissory note says. Loan balance is treated as a distribution actually paid on the date of default. Thanks! Austin Powers, CPA, QPA, ERPA
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