No. of Recommendations: 0
Question for the board:

I have read the 'Managing your Retirement' article on rolling over stocks in a 401k, and read some of the back posts on this board, but I still have some questions - the back posts and the article were excellent, but I still have some details that I hope you can help me with:

1)If I have company stock in my 401k, I believe that when I leave my job, I can either roll this stock directly into an IRA, or I can somehow take direct delivery of these stocks. Do I have this right?

2) If I can take direct delivery of these stocks, I find it amazing that I can move them from the tax-deferred 401k to a "retail" without some big penalty tax. But that seems to be the case - can anyone confirm this?

3) If I leave my job, and I want to take my company stock that is currently in my 401k and move it to a non-IRA account, then I believe I have to pay income tax on the cost basis of these shares, right? Can anyone explain how? On my annual filing on April 15th? Or is it handled separately?

4) If the company stock is now in a non-IRA account, and I wait 5 years and then sell it at a (hopefully) higher price, then I would only owe Capital gains tax on the difference between the sell price and the cost basis at the time I took it out of the 401k plan, right?

Sorry for the many questions, but maybe someone else can benefit from the answers as well -

Thanks in advance - JK

3) If I take direct delivery of these stocks,

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.