mjf06241972 Posted March 17, 2019 Posted March 17, 2019 Can someone give me some help with participant loan? Owner wants to take a loan for $250,000 for the purchase of a primary residence. They have over $500k in the account so 50% is not an issue. They will have to amend the plan to add the loan for residence purchase but I am looking for some guidance on if someone can 1) take a loan for over 5 years and 2)can it exceed $50,000 3)what is the process? Thank you.
Belgarath Posted March 18, 2019 Posted March 18, 2019 Save yourself some time - maximum participant loan dollar amount is $50,000. Yes, loan to purchase a primary residence can exceed 5 year period if plan allows it - plan is not required to allow it. Finally, the "process" is governed by the plan document/administrative procedures. Check with the Plan Administrator and/or the TPA. Lou S. 1
BG5150 Posted March 18, 2019 Posted March 18, 2019 Keep in mind, you cannot have over $50,000 at one time in 12 months. So, you can't allow for two loans at a time and let someone take two $40,000 loans right away. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
david rigby Posted March 18, 2019 Posted March 18, 2019 The original poster might find some value in this set of FAQs from the IRS: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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