Take Money from Traditional IRA or 401K....?

Well unless you are seperated from service with the employer who sponsors your 401k you can't withdraw money at all. You may be able to borrow money though, that means you have to pay yourself back, and if you leave the company without paying off the loan you will have to pay the taxes and penalty. If you withdraw funds in a lump sum from a 401k and you are seperated from service you have 60 days to place it in an IRA or you will pay the penalty and taxes.

Under certain circumstances you can withdraw money from an IRA without paying a penalty they are:

Qualified Education Expenses

First Time Home Purchase (primary residence)

Payment of excessive unreimbursed medical expenses.

Payment of medical insurance premiums while unemployed.

Total and permanent disability.

Distribution of account assets to a beneficiary after you die.

If you withdraw for any other purpose you will have to pay the taxes and the penalty.

If you are talking a loan then you repay it over a period of 5 years.

You can't repay a withdrawal from a 401k. It has to be deposited into an IRA (considered a rollover- although not a direct one). A hardship withdrawal is not eligible for rollover to an IRA. Certain In-service withdrawals can be rolled over but not all of them.

If you are talking an actual withdrawal of your money then you have 60 days to deposit the amount back into an IRA. If that period spans the tax year you'll have to keep really good records. If you get it into an IRA within that 60 day window then it's not taxable and not penalized. If it's outside the window then it's both penalized and taxed.