401(k) Loan
We have a client that has a $ 50,000.00 loan on a 401(k) currently valued at $ 750,000.00. He just changed jobs and was notified that he has 60 days from the date of said letter to “Rollover” the $ 50,000.00 into an IRA or be subject to taxes & a 10% penalty ( under age 59 1/2 ).
My question is: Is it all or nothing or can he rollover lets say $ 30,000.00 and be subject to the taxes and 10 % on the remaining $ 20,000.00?
Permalink Submitted by Alan - IRA critic on Thu, 2017-05-11 20:23
Yes, he can roll over less than 50k and avoid tax and penalty on the amount rolled over. He will get a 1099R for the direct rollover and another for the 50,000. If he rolls over 30k himself, his line 16b will show 20k.
Permalink Submitted by Richard Ernst on Thu, 2017-05-11 20:48
Thank you Alan