I have a loan and was wondering if I can change it to a distribution and what the penalties would be. I am just over 60 years old and took the loan out after
I was 591/2.
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401K Loan to distribution
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 pogden204 |
401K Loan to distribution |
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Posts: 1 (02/28/08 14:14:14) |
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DCK101 |
Loan to Distribution | ||
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Posts: 341 (03/03/08 17:19:48) Elite Member |
Assuming it was a bona fide loan, meaning it was requested as a loan, you have a promissory note that requires repayment, and it conforms to all other
requirements of a loan then you cannot subsequently change it to a distribution.
I suppose if you put up a real fuss about the payments, the Plan Administrator might decide to stop the repayments and default the loan. The downside is that the remaining loan balance would be reported as taxable income to you (but no specific penalties). Your ability to take another loan in the future might also be affected. |
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