Hello!
I have a somewhat straightforward question, and I am hoping someone can confirm that my strategy is allowable and, if not, help me understand why.
Earlier this year, I left a job with a 401k loan (for example's sake, I'll say $10k). I then rolled over my 401k balances into both a Roth IRA and a Traditional Rollover IRA. The loan was taken entirely out of my pretax balance in the 401k. The 401k was open for six years if that matters (I don't think it does?). I'm not at retirement age.
I do understand that I could just pay off the offset into the Traditional IRA with money from another source, but I would prefer not to do this.
I currently have enough contributions (and the paperwork to back it up) in my Roth balance to cover the loan. Is it allowable to take a withdrawal from my Roth IRA (from the contributions), moving it to the Traditional Rollover IRA, as a way to pay the offset? Does this save me from paying taxes/penalties now (I recognize that I am moving post-tax money into a pre-tax account and will have to pay tax again later)?
Thanks for the help.
