Participant loan
Loan from a Solo 401(k) plan to its participant, capped at the lesser of $50,000 or 50% of vested balance.
Definition
A participant loan is a loan the plan makes to its participant under IRC Section 72(p). The maximum is the lesser of $50,000 or 50% of vested account balance. Repayments must be at least quarterly and the loan must be repaid within 5 years (longer for principal residence). A missed quarterly payment can trigger a deemed distribution. Form 5500-EZ reports both the year-end loan balance and a during-year loan indicator.
Why it matters
For IRS Form 5500-EZ, this term helps decide which records, dates, values, or review questions belong in the packet.
How the tool uses it
Solo 5500 treats this as a review signal. The user enters the facts, checks the source-linked explanation, reviews the packet, and files through the official channel when the supported case still fits.
When to check the source
Check the official source when the answer depends on eligibility, late filing relief, official correspondence, valuation, or a fact you cannot verify from your own records.
Source and review date
Last reviewed: . Use the linked source for the official wording behind this term.
Official source: IRS Form 5500-EZ filing notices