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Author: bruheim Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121322  
Subject: 403(b) distribution Date: 8/24/2000 4:09 PM
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There is another question on the board that reminded me that I have my own question - I also recently took a 403(b) distribution from a recent former employer. The plan was designed so that employees contributed after-tax dollars and the employer matched those funds. The trustee sent me two checks, without much explanation, but I assumed the smaller one was equal to the amount of my contributions (and already taxed) and that the larger one was their matching funds plus investments gains. The larger check was rolled into a stand-alone IRA, and I put the smaller one into a brokerage account.

Does this sound right to you regulars?
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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39081 of 121322
Subject: Re: 403(b) distribution Date: 8/24/2000 4:51 PM
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There is another question on the board that reminded me that I have my own question - I also recently took a 403(b) distribution from a recent former employer. The plan was designed so that employees contributed after-tax dollars and the employer matched those funds. The trustee sent me two checks, without much explanation, but I assumed the smaller one was equal to the amount of my contributions (and already taxed) and that the larger one was their matching funds plus investments gains. The larger check was rolled into a stand-alone IRA, and I put the smaller one into a brokerage account.

Does this sound right to you regulars?


If your assumptions were correct, yes. Do I think it's right to operate on assumptions rather than facts? No.

TMF ExRO
Phil Marti

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39177 of 121322
Subject: Re: 403(b) distribution Date: 8/27/2000 8:19 PM
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<<I also recently took a 403(b) distribution from a recent former employer. The plan was designed so that employees contributed after-tax dollars and the employer matched those funds. The trustee sent me two checks, without much explanation, but I assumed the smaller one was equal to the amount of my contributions (and already taxed) and that the larger one was their matching funds plus investments gains. The larger check was rolled into a stand-alone IRA, and I put the smaller one into a brokerage account.>>

As Phil points out, one of the checks was likely your after tax contributions, which you put in your personal account without tax...since they were all post-tax contributions.

The other check was obviously the earnings on those contributions...which can be transferred to an IRA account without any current tax issues.

The problem is: which is which? If your 403b investments were crap, it's possible that the BIGGER check represents your contributions, and the smaller represents your earnings. If that's the case, you've got yourself into a fix.

So I would echo Phil's advice...get hold of somebody at the company and find out EXACTLY which is the contribution and which is the earnings. Then act accordingly. Making an assumption could be very damaging.

TMF Taxes
Roy

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