Can a S-Corp with a Keogh plan have loans?

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Denise S. Prince
Praxis Consulting, Inc.

See the flush language at the end of IRC ss 4975(d) - certain "shareholder-employees" can't take loans.

An S-Corp can have loans, but not for owners. An S-Corp cannot have a Keough since they are only for Sole Proprietors.

[This message has been edited by Ray Williams (edited 08-20-1999).]

But is there a recent amendment to the Code (past two or three years) that says the DOL can grant an administrative exemption to the usual prohibition against loans to owner-employees (including S corp shareholders?)?

Might not be a practical solution, but perhaps an option anyway.