John A Posted April 16, 2001 Posted April 16, 2001 A prohibited transaction occurred when a loan was given to a partner who had an interest of more than 10% in the capital or profits interest of the partnership. If the partner is unable to repay the loan, how can this be corrected? Any creative ideas out there?
Bill Berke Posted April 17, 2001 Posted April 17, 2001 If the plan is not a 401k) plan, then you can deem the loan a distribution. The complete rules are found in the IRS reg's and pronouncements. If the plan is a 401(k) plan, the process has some twists, but these rules are also found in the reg's.
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