Loan from 401K

[Davc]

Where do you get the "tax free" distribution for hardship?

Isn't paying tax a hardship?

[Skate1968]

Where do you get the "tax free" distribution for hardship?

Luis,

I'm just noticing your post now. I see that i mispoke. I meant to say 'penalty free' not 'tax free.' Meaning this guy had a 'hardship' which would have allowed him an early distribution of 401k without penalty.

(at least i think that's the case-- same as an early withdraw of a traditional IRA -- it's been a while since i looked at it)

[BOB W]

Refer to Pub 575, as there are situations where the 401(k) loan not treated as a distribution does not qualify for interest deduction.

I'm wondering if this is just meant if it was personal use interest. Since the money can be traced to rental property would that make a difference? I say no, but it needs to be looked at.

ADDED> Loan needs to be repaid before seperation from Company..............