A code 1M distribution is certainly taxable and subject to an early-distribution penalty unless you come up with the money and roll it over before the due date of your tax return, including extensions. If you do not have the money to complete the rollover, whatever portion you do not roll over is taxable and subject to early-distribution penalty.
The main differences between a code 1M distribution and a code 1L distribution is that a code 1L distribution is not eligible for rollover and does not satisfy the loan.
