re: 401k loan for home improvement

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So in 2019 I will have paid $800 in taxes to get the other money $10,000 and then on the disbursement pay taxes again (which would at that point be a wash with pretax contributions).

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If I understand your question then yes. This would be no different than you paying off a loan from a bank using post income tax money.

The point is that the principal portion of a 401k loan isn't taxed twice. The principal isn't taxed at all assuming you pay the loan back. Taxation doesn't happen till you take a disbursement.

Take a look at this as it might be clearer
https://www.reddit.com/r/personalfinance/comments/1bbqp8/psa_401k_loans_are_not_double_taxed/

How do most 401k loans work?

At my previous employer, they functioned more like a LOC (as I understood it). The money never actually left your account, and you were never punished for it by pausing contributions or other ways. It was simply loaned to you against the value in your account, you paid the interest to yourself. Is there a negative to a loan in this manner?

Current employer pulls the loan value from a proportion of your investments (eg cant pull just from bonds) and reinvests them upon repayment.

I'm very interested in this subject.

I am looking to buy a rent house with cash because I can get a better deal. Instead of using my savings, I'm exploring a 401K loan for $50K.

My plan is to use the 401K loan to purchase and fix the home and then refinance the home with a conventionsl mortgage based on a new appraisal and pay 401K back within 2-4 months. So I'm only coming out of pocket about $2500 for this transaction: the fees and notes while I renovate. Cash flow on the home should be about 10K per year.

Can someone tell me why a Heloc would be a better route?

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It is true that I could take a loan and immediately pay it back with the same loan money and not be taxed. I can’t envision that being a typical scenario.

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What do you mean by taxed? When you take a 401k loan there are no taxes involved (unless you don't pay it back then you'll be penalized and taxed as it will be treated as early distribution).

Whether you use the original loan money or some other funds to pay the loan back is irrelevant. Your overall tax liability isn't increasing due to the 401k loan principal.

There are plenty of sites that I've linked that show the math on this. Feel free to find one that shows otherwise.