Solo 401K Loan Question

[Robert Reineri]

Can one take a loan from the Solo401K in the current year, and use a distribution from the SoloK to pay back the loan in a future year? For example, if I borrowed $10,000 this year, made payments each month until 2019, can I use a distribution in 2019 to repay the remaining balance on the loan? 

The reason I ask is that I have need of the money now, but don't want a taxable distribution from the plan until next tax year.

I don't see any reason why this would be an issue but wanted some expert opinions. I'm not trying to cheat, because I would still pay taxes on the $10,000 distribution in 2019. So the IRS would get it's money in full anyhow. It's just that I'm anticipating a "better" tax situation next year - that is, for personal medical reasons in my family, I'm anticipating a lower level of income next year.

[Brian Eastman]

@Robert Reineri

You should contact your plan provider or CPA to discuss the details.

The tax impact is the same regardless of which route you choose.  Taking an actual distribution and properly recording that and doing withholding may be extra work, but that is a "clean" event as opposed to defaulting on the loan.