Paying Off a Mortgage With An Inheritance

[Mark Sacandy]

At great personal cost, it appears that my wife and I will be receiving an inheritance sufficient to pay off our house and possibly allow me to retire very soon.  What are the tax implication of such a transaction?  Would there be any benefit (or is it even possible) to borrow from my 401k to pay off the house and then repay myself?  I can't see how such a thing would be beneficial, but that's why I'm asking.