
Thanks for your help,
John B.
ANSWER: While the IRS 401k rules permit the transfer of outstanding 401k participant loans to a 401k including a solo 401k, it is ultimately up to the employer sponsoring the 401k plan as to whether or not the outstanding 401k loan can be transferred. Keep in mind that if the loan is not in a default there is a higher chance that they will allow you to transfer out the 401k to loan to another 401k. It has been my experience that most employers will require the participant to pay off the outstanding loan before processing the outgoing direct rollover or transfer to a solo 401k or it will be treated as a distribution by reporting it on form 1099R under a code 7 or 1 depending on the participant’s age.