bzorc Posted March 29, 2014 Posted March 29, 2014 Participant took a 401(k) loan, proceeds of which came from his Roth 401(k) source. Participant has left the company and cannot repay the loan. Question is: Is the default considered taxable? I have never encountered this before, and the 1099-R received by the participant for 2013 indicates that the entire defaulted balance is a taxable event. To me this seems as if this is being double taxed. Any replies would be helpful, thanks!
Jim Chad Posted March 31, 2014 Posted March 31, 2014 Part of it might be taxable. But he has some basis in that account and it would only be gains that are taxable.
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