Guest mcdanieldon Posted March 15, 2004 Posted March 15, 2004 I received a 1099-r for $13,921 after defaulting on a 401k loan. It was a $10K loan and $3,921 in interest. Do I have to claim the interest and pay taxes and penalty's on it?
Belgarath Posted March 15, 2004 Posted March 15, 2004 I would ask the Plan Administrator for a detailed explanation/breakdown. If there is a loan default, there is a deemed distribution of the entire loan balance, including interest that is accrued through the date of default. 1.72(p)-1 Q&A-10. However, whether the interest calculation/reporting is correct is impossible to answer from this end.
Guest mcdanieldon Posted March 16, 2004 Posted March 16, 2004 I saw this reference in the last post "1.72(p)-1 Q&A-10". What does it refer to?
Lame Duck Posted March 16, 2004 Posted March 16, 2004 It refers to an Internal Revenue Service regulation under Code Section 72.
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