When Eloise (42) lost her job this year, she had an account balance of $45,000 in her 401(k). She also had an outstanding 401(k) plan loan of $5,000 secured by that balance. She made no after-tax contributions. If Eloise is unable to repay the loan and the loan amount is treated as a distribution, how much is subject to the early distribution penalty?

1) $2,500

2) $5,000

3) $45,000

4) $50,000