Loan issued from Roth 401(k) account

[Jean]

Can someone provide a primer example of a loan issued from a Roth 401(k) account. How is the loan repayment applied to the account. What are the default tax implications. Is there a code reference? Does the answer change if the participant has / has not satisfied the qualified distribution criteria?

[Guest mjb]

No one can answer your question because the IRS has not provided much guidance on distributions from 401k Roth accounts (see proposed 402A regs 1/26/06) and few employers have adopted them. The IRS has indicated that there are many unanswered questions on Roth distributions from 401k plans which will have be decided by sponsors.

[E as in ERISA]

I don't know details of admin. But there must be separate amort of the Roth half. And a deemed distribution is always nonqualified even if qual requirements met.

[Bird]

And a nonqualified distribution would be subject to proportionate taxation. Cowards like me will not permit Roth loans.