Where do I put a loan I took from deferred comp acct I used for a downpayment for a house

[Coleen3 · Accepted solution]

There are two issues here. If you took a loan, until such point as it is deemed that you are not paying it back, it is not income. If that happens, you will receive a 1099-R with the balance of the loan amount.

Again, if it does happen, you will not be able to avoid paying the 10% penalty for early distribution because that exception is only available with an IRA.

Exceptions to the additional 10% tax apply for early distributions from an IRA that are:

• Made to a beneficiary or estate on account of the IRA owner's death
• Made on account of disability
• Made as part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary
• Qualified first-time homebuyer distributions
• Not in excess of your qualified higher education expenses
• Not in excess of certain medical insurance premiums paid while unemployed
• Not in excess of your unreimbursed medical expenses that are more than a certain percentage of your adjusted gross income
• Due to an IRS levy, or
• A qualified reservist distribution