Steve B. wrote:

- quote -

Hmmm. More facts are needed. What kind of retirement plan?
Did the plan ever send you a 1099R?

Post that information and I think I can post an answer.

Scott W Stevenson, CPA in CA
stevensonscott[at]yahoo.com

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- quote -

no, unless you quit or were terminated before you paid the
loan back. It is then considered a distribution from the
plan...

Dave

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"Steve B." <nomas99[at]aol.com> wrote:

- quote -

Before we can answer your question, we need to know why IRS
thinks you owe more taxes. They should have sent you a
letter explaining why they think this. Let us know more
specifics and maybe we can help.

Wayne Brasch, CPA, M. S. Taxation

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- quote -

There are no tax consequences to borrowing money from a 401K
if you pay it back on time. Assuming the plan does not
limit the time period, you generally have 5 years unless the
funds were used to buy a home. In that case, it can be as
long as 30 years. The plan administrator should not issue a
1099-R for a loan. If you fail to pay back the loan or fail
to pay it back on time, you would be subject to income tax.
If under age 59 1/2, you would also be subject to the 10%
add'l tax.

Alan
http://taxtopics.net

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Steve B. <nomas99[at]aol.com> wrote:

- quote -

There are many types of plan, and the tax consequences of a
loan are not the same.

A qualified employer plan such as a 401k plan allows loans
and so long as you are not in default, that loan is not
taxable income.

An IRA doesn't permit loans, so any distributions from an
IRA cannot be called a loan and ubnless rolled over within
60 days are taxable, and perhaps subject to additional tax.

Other plans have other rules.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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nomas99[at]aol.com (Steve B.) writes:

- quote -

Such loans are not taxable unless they go into default.
In your situation, that doesn't appear to be the case.
Just let IRS know the facts and your problem will be
remedied.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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The IRS believes I owe more taxes than stated on a previous
personal tax return. I took out a loan of $17,800 from one
of my retirement plans. I began paying back the loan
imediately thru payroll deductions (which included
interest.) The loan has since been paid back in full to my
retirement plan, including interest. I was not aware that a
loan taken out of a personal retirement plan was taxable. I
thought early withdrawals were taxable but not a loan. Do I
owe the taxes on the loan from my retirement plan?

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