Jump to content

Loan - should of been defaulted


Recommended Posts

We have a plan that we just took over as TPA.  In reviewing the information it was discovered, that yhere is a loan that was issued 8/2012 that is still showing as active.    Does not appear that any loan payments were ever made nor was it ever defaulted.

If I am reading Rev Proc 2021-30 correctly, 6.07(3)(d)  -  it look like i can use the SCP if the participant would pay the loan off in full, plus interest.

Am  I reading correctly or does this have to be filed through VCP?

Thank you!

Link to comment
Share on other sites

I'm assuming that it's not a loan for primary residence and it was a general purpose loan? If that's the case, the participant cannot make payment on the loan because the eligible maximum period for repayment has expired (see Rev Proc 2021-30 6.07(3)(a). Section 6.07(2) says to issue a 1099R for the year in correction, which I'm assuming is this year. 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...