Question

Question 23 (1 point) A more-than-5-percent shareholder-employee of an S corporation may take a participant loan as long as other employees are allowed to take a loan from the plan. O a) True O b) False Question 24 (1 point) Elmer has a $40,000 vested account balance in the Credit Corp, profit sharing plan. He may take a loan of $25,000 without any tax problems.

Answer 1

Solution:-

23.

b) False

24 Elmer has a $40,000 vested account balance in the Credit Corp. profit-sharing plan. He may take a loan of $25,000 without any tax problems:-

b) False

Explanation:-

According to the Profit Sharing Council, 14 percent of employers with 401(k) plans, and 66 percent of those with profit-sharing plans, did not permit plan loans in 2002. If your plan does allow for loans, you can borrow up to $50,000 or 50 percent of the current value of the account, whichever is less.