Q. If I borrowed money in 2018 but retired in 2019, to what year would the taxable distribution be allocated to? If this money will eventually be taxed anyway, what’s the difference with getting taxed now at the 20 percent or later at a similar rate?
A. A distribution will be taxable in the year in which it is declared as such, not the year the loan was taken. If the tax cost is the same either way, it probably won’t matter when it is taxed.