Retirement tax questions

In addition, it the loan is defaulted while you are still employed then the loan will be paid off from the 401(k) funds which then becomes a taxable distribution taxed at your margional tax rate plus a 10% penalty if you are under age 59 1/2.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**