401k Loans Primary Residence

[PainPA]

Is there a regulation on the term a 401k loan can be taken for a primary residence?

I thought it was always 15 years...

[JanetM]

The length isn't found in section 72, but 10 to 15 is normal. Have seen some plans allow 20. But since the interest ins't deductible it makes sense for most folks to get a bank loan instead.

[austin3515]

It's actually the opposite of deductible, in that it's double taxed!! Once when the interest is repaid with after-tax dollars, and then again when it is distributed!

[QDROphile]

Stop with the double tax BS already. Also, the interest can be deductible if you know what you are doing. Not recommended because it is easy to make mistakes and blow the deduction.

[Guest mjb]

The interest is deductible if the participant receives a mortgage from the plan, e.g., the plan takes a security interest in the home, not just the plan assets and records the mortgage as a lien on the residence. Few plans want to be involved in loaning plan assets under these terms. Also the deduction is not available if the borrowed funds come from elective contributions or the borrower is a key employee- See IRC 72(p)(3).