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Subject:  Re: 401k to IRA Date:  8/19/1999  4:49 PM
Author:  intercst Number:  13265 of 88772

rcp721 asks,

I have recently retired. I have a 401k plan that has company stock in my account. My question is: if I pull out the company stock in certificate form, can I rollover the certificates into an IRA with NO tax penalty ?

I suspect you'd have to get both your 401k administrator and IRA Custodian to agree to a "custodian to custodian" transfer of the stock certificates to do that without tax consequences.

You might also look at the "net unrealized appreciation (NUA)" on your company stock. If you have highly appreciated stock (e.g., the stock cost you $10/share and it's now worth $100/share) it might make more sense to pay ordinary income taxes on the $10 cost basis and transfer the shares to a taxable account. When you sell the shares you pay capital gains rates (max=20%) on any gain over the $10 cost basis.

If you rollover the shares into an IRA, you pay ordinary income tax rates (max=39.6%)on any gains.

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