repay 401k loan from IRA R/O?

Submitted by Geoffrey Kasher on Fri, 2014-09-19 18:02

Client has an outstanding loan on his 401k and is still employed by the company.

He also has a R/O IRA from a previous employer in a brokerage account.

Is there a way to do trustee to trustee transfer to repay the current loan?

Thanks in advance

Permalink Submitted by Alan - IRA critic on Fri, 2014-09-19 18:51

No. Loans are not taxable when made, so must be repaid with after tax money, whether by payroll deduction or other payments with after tax funds.

Permalink Submitted by Geoffrey Kasher on Fri, 2014-09-19 19:35

thanks