You have two options when you have an outstanding loan in a plan and want to either take a distribution of the funds or roll it over into an IRA.

First, if you pay back the outstanding loan balance BEFORE you roll the balance over into an IRA you will not have to pay federal tax on the loan balance. You will have successfully repaid the loan which makes the money qualified pre-tax money once again. You can then transfer it to an IRA where it remains pre-tax money until you take a distribution after retirement. That is when you will pay taxes.

Second, you could choose not to repay the loan and, instead, rollover the remaining balance into the IRA. In this case you won't have to fork over the $36,000 but you will have to declare the distribution on your taxes which will cost you a 10% penalty plus taxes. So, if for example your federal taxes are 20% you would have that plus the 10% penalty reduced from your tax refund or increase your taxes due, whichever is the case. In that example it amounts to about $10,800 so that is a lot, but if you don't have the $36,000 to pay back, it is what you are left with.

Your question might be about your balance and not your repayment options. If that is the case, it is pretty normal for your loan balance to be included in your total balance, so it wouldn't surprise me if $36,000 of your $340,000 is the loan. If that is true, your balance after paying back the loan would still be $340,000. You would simply move the loan balance to zero and increase the balance of other investments by $36,000. Going back to my prior scenarios, if you pay back the loan and your loan balance is part of the total balance you would be rolling over $340,000. If you don't pay back the loan and your loan balance is part of your total balance you would be rolling over $304,000 plus paying tax and the 10% penalty on the $36,000 at tax time.

If you do choose not to repay the loan your plan should send you a 1099 in the mail at year end for you to do your taxes.

I hope this answers your question.