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Retirement tax questions
You would have to amend your 2020 tax return. A loan that is in default is generally treated as a taxable distribution from the plan of the entire outstanding balance of the loan (a “deemed distribution”). The plan’s terms will generally specify how the plan handles a default. If it were taxable in 2020, you would receive a 1099-R which you can enter in TurboTax.
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March 23, 2021
4:18 PM