EdgarBeaver

The story doesn't end when you pay back the loan. The account isn't closed and zeroed out. When you take out a loan the money you took out was replaced with after tax dollars. Those same dollars are taxable upon your final withdrawal from the account. There is no basis created in a qualified plan for loan repayment. Tax is paid twice = double taxed. no? I've gone round and round with this too...and EdgarBeaver is a tired rodent

Folks, what I don't understand is this. The original contribution came from your payroll pre-tax (lets assume). You take a loan and repay the loan with after tax money. ... ... Then..... one day you retire and withdraw money from your account. There was no basis created for portion of the account that was a loan repayment - that amount gets taxed in the year you withdraw it. Am I just not getting it? Wasn't this money double taxed? Little help?