Using SD-401(k) loan for personal home and taxes on distributions

[Tom Degroodt]

My wife and I are planning to set up a SD-401(k).  With all of the changes in both the CARES act and with Covid I have some questions about getting a loan from the plan for primary residence.

We are planning on purchasing another home for our personal residence and putting our current home into rental inventory.  We would like to keep our liquid money that is not in the retirement funds, so if I could loan myself money for a down payment for 15 years or longer that would work great for us.

Is the loan based on how you set-up or amend the paperwork when setting up the SD-401(k).

Also on a separate question, it sounds like the CARES act allows you take a distribution and pay it back in 3 years.   If payed back no taxes are due.  If you take a distribution would you pay 1/3 of the taxes every year and then amend you taxes if you paid the distribution back?  Would the 1st tax payment be due on 2020 taxes (April 2021)?

Thanks,

Tom DeGroodt

Evans, Ga