My company was recently bought out and our 401K is rolling over into a new fund. I have a loan outstanding on the old 401K. The loan will not be rolling over to the new fund. I have three options, the way I see it. 1. I can pay the loan off (not really possible at this point). 2. I can keep the old fund open, rolling over whatever funds I have in it to the new fund, but paying the loan back in installments into the old fund. 3 Taking the loan as income and paying the tax on it. There would be no penalty associated with this because I am 61 and eligible to withdraw funds from it without penalty, only tax.
I suppose there is a fourth option. I could take a loan out on my new 401K and use that to pay off the old loan.
My question is, what would the taxes be on $12,000 if I decide to take it as income and which option is best?
I suppose there is a fourth option. I could take a loan out on my new 401K and use that to pay off the old loan.
My question is, what would the taxes be on $12,000 if I decide to take it as income and which option is best?
