Separating from my company and have an outstanding 401K loan balance (1st home purchase) & if defaulted am I still subject to the 10% penalty?

Forum|Forum|7 years ago
June 6, 2019
1 reply
13 views

Can I also avoid federal income tax if the loan is offset & the loan is withheld from total rollover? And I do not add the cash to the ira to pay it off

TurboTax Basic Windows

Rainman12

Alumni - Champ

A 401k loan, if defaulted, becomes a distribution subject to full taxes (including 10% penalty). First home exception applies only to IRAs.

Separating from my company and have an outstanding 401K loan balance (1st home purchase) & if defaulted am I still subject to the 10% penalty?

1 reply

Unlock tailored help options in your account

Get answers to all your tax questions

Unlock tailored help options in your account

Get answers to all your tax questions

Sign up

Login with SSO

Let's get you signed in

Login with SSO