401K loan - left employee

[coolasacucumber]

Thank you very much @macuser_22. What do you mean by rollover? He spent the money for paying off his mortgage. Does rollover mean that contributing back to the same IRA? 

He did not file his tax return yet and planning to file for an extension. I am assuming that contributing to the traditional IRA will eliminate the tax while Roth IRA contribution will only eliminate the 10% penalty.  Is it correct. Somewhere I read that he has only 90 days to return the money into the traditional IRA. It had been almost a year now. Thank you very much again for your detailed answers. I appreciate them. 

[macuser_22]

The tax law for a code M means that the the money can be "rolled" into an IRA.   It is not a contribution but a rollover.    The money he obtained for the loan can be put into an IRA as a rollover of that money.     Money is fungible so it makes no difference what the actually dollars come from.

[coolasacucumber]

Thank you very much!