SDIRA Loan Question
I was the beneficiary of my mother's SDIRA, and she had made a loan to a relative when he was starting a business. I would like toforgive this debt and clear the asset from my account, but the woman with whom I spoke stated that I would be required to take it as a distribution and pay taxes on it. My thought was, and the discussion was had, that if I forgive this debt, then the relative would be required to report this as income and pay the taxes accordingly. Then, regarding my account, it would be a loss that would be realized over time. I have the option of claiming it as a loss by calling the debt "uncollectible", but I then have to document efforts to collect, when in fact, that's not the case.
Does anyone have any experience with this, and if so, does it sound right?
Thanks in advance