Texas Proud
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- May 16, 2005
- Messages
- 17,310
The bank example is not a valid/fair comparison unless I own the bank like I "own" my 401k. If I do indeed own the bank, and then pay loan interest to it, yes, I will be doubly taxed, just like I am doubly taxed on interest in the case of a loan from my 401k.
No, it is exactly the same... at the end of the day your 401 made interest income and you paid interest expense.... the only difference is who paid the interst income to the 401 and who you paid the interest expense to.... but since you do not want to see it that way... have a great day...
PS... in your example of interest free loans.... yes, you are then taxed on the interest income you pay to the 401.... but then you got a BENEFIT from that money that you are not supposed to get.... forcing you to pay interest on that money removes that benefit....