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Author: tahoepiratefan Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75378  
Subject: 401k Loan and Termination Date: 4/18/2001 11:23 AM
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I recently got fired. I have an outstanding 401k loan. How long do I have before I must repay the loan without adverse tax consequences? I am of the belief that if I do not repay the loan within a certain timeframe that the IRS considers the balance to be a distribution, and subject to income tax and penalties as I am not 59 1/2. Please advise.
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 29190 of 75378
Subject: Re: 401k Loan and Termination Date: 4/18/2001 1:42 PM
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Greetings, tahoepiratefan, and welcome. You wrote:

I recently got fired. I have an outstanding 401k loan. How long do I have before I must repay the loan without adverse tax consequences? I am of the belief that if I do not repay the loan within a certain timeframe that the IRS considers the balance to be a distribution, and subject to income tax and penalties as I am not 59 1/2.

Sorry about your job loss. As to the loan repayment, that's up to the plan, so your former HR folks will have to tell you what the deadline is. Typically, it will be around 90 days before the loan is called in default. That's when it becomes taxable and subject to the early withdrawal penalty as well.

Regards..Pixy

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