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March 30, 2022
Question

Taxes on 401k loans for home purchase

  • March 30, 2022
  • 1 reply
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I took out a loan on my 401k to buy a home. I am separated  with the company and the loans have defaulted. I took over $10 k. Do I pay taxes on the $10k that was for the home purchase? I know he rest of those loans have to be taxed. However the 1099 received is for everything including the $10k for the home purchase. 

1 reply

March 30, 2022

Yes, you must pay the income tax and penalty - the exclusion for the penalty only applies to IRAs.