Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Tax Saving Strategy Date: 3/4/2003 11:30 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Aren't there tax savings for lump sum distributions?

Not to my knowledge, though I hardly claim to know all there is to know about this stuff. As MarleysGhost notes, "lump sum distributions" generally refers to withdrawing all of (or maybe just a large piece of) a retirement plan (like a 401K). If the funds are coming from such a plan, then you can typically roll them over into an IRA, and that's a large tax savings (or more properly, tax deferral). In the original post, it sounded like the sum was more of a golden-parachute kind of thing - the employer saying, "here's a big wad of cash, enjoy your retirement". So it's more like a bonus, and as far as I know, will be fully taxable as ordinary income to the recipient.

It's a shame the company won't be more accommodating - spreading the payment out over several years would help both the employee (less tax) and the employer (their cost is spread over several years).

Lorenzo
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement