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URL:  http://boards.fool.com/the-question-was-ltlti-am-in-the-general-11851926.aspx

Subject:  Re: 401k dividends Date:  1/22/2000  3:19 AM
Author:  carl108 Number:  25722 of 121162

The question was...

<<I am in the General Electric Savings & Security Plan (401k) and was told that I could have the GE stock dividends paid to me quarterly without the 10% penalty, and pay regular income tax.>>

I have a similar situation at AlliedSignal now Honeywell. The dividends that the stock portion of the 401k generate are sent to me once each quarter. I don't have a choice in the matter and the company claims that they don't either. I believe this is not considered a distribution because the money never gets into the 401k. Hence no penalty. The 1099 I get calls it a dividend so I list it as such and pay taxes on it.

Carl

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