3830. Are there limits on the amount that can be borrowed under a qualified plan loan?Nuco Employeercline202014-08-17T19:36:00Z2014-08-17T19:36:00Z23141793Summit Business Media144210314Site Map/Retirement Plans/Pension And Profit Sharing/Taxation of Distributions/Plan Loans2005-01-24T00:00:00ZTaxFactsDefaultArticle116700432-00-tf1.xml434.00;#2261;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 1What requirements must a qualified plan loan meet in order to avoid taxation as a distribution?85700.0000000000TaxFactsDefaultArticle2010-01-14T23:58:05ZSBMEDIA\moss-admin3830. Are there limits on the amount that can be borrowed under a qualified plan loan?The amount of the loan, when added to the outstanding balance of all other loans, whenever made, from all plans of the employer, may not exceed the lesser of (1) $50,000 (reduced by the excess of the highest outstanding balance of plan loans during the one-year period ending on the day before the date when the loan is made over the outstanding balance of plan loans on the date when the loan is made), or (2) one-half of the present value of the employee’s non-forfeitable accrued benefit under the plans, determined without regard to any accumulated deductible employee contributions. A plan may provide that a minimum loan amount of up to $10,000 may be borrowed, even if it is more than one-half of the present value of the employee’s non-forfeitable accrued benefit.IRC Sec. 72(p)(2)(A). For valuation purposes, a valuation within the prior twelve months may be used, if it is the latest available.Notice 82-22, 1982-2 CB 751. If a loan does not meet the dollar limitation, distribution of the amount in excess of the dollar limit is deemed to occur when the loan is made.Treas. Reg. §1.72(p)-1, A-4(a). If the outstanding loan balance meets the dollar limitation immediately after the date when the loan is made, the loan will not be treated as a distribution merely because the present value of the employee’s non-forfeitable accrued benefit subsequently decreases.General Explanation—TEFRA, p. 296.In determining the outstanding balance and the present value of the non-forfeitable accrued benefit under a plan, an employer’s plans include plans of all members of a controlled group of employers, of trades and businesses under common control, and of members of an affiliated service group (Q 3807, Q 3809).IRC Sec. 72(p)(2)(D)(i). The plans include all qualified pension, profit sharing, and stock bonus plans, all Section 403(b) tax sheltered annuities, and all Section 457 deferred compensation plans of aggregated employers.IRC Sec. 72(p)(2)(D)(ii).