ESOP Contributions After Year end (Part 2)

[Guest AG]

I'm still confused as to whether an additional payment can be made after year end, and applied retroactively.

I have a calendar year 1999 ESOP, where all the scheduled payments have been made during 1999. I can calculate the release based upn the P & I method which is in place. Scheduled payments have been made in January and February 2000 which will be applied toward the 2000 release formula. The client wants to know if they can make the scheduled payment on 3/1/2000, and an additional payment on 3/1/2000. (The loan allows extra principal payments.) They want the extra 3/1/2000 payment to be applied against the 1999 release, and deducted on the 1999 tax return.

Is it possible?

I know the extra payment falls within the 404 time period, but I don't see how I'd release the extra shares.

It seems that the extra payment for 1999 shoould have been made prior to 2/1/00.

thanks

[RLL]

What your client wants to do is OK. In fact, the January and February principal payments could have been treated as 1999 contributions.

What's the problem?

[This message has been edited by RLL (edited 02-28-2000).]