Greetings Foolish Tax-Payers!While wrapping up our taxes (procrastinator? Me?), I had a thought that could potentially save us some $$$, but I thought I'd ask about it here before attempting the IRS phone lines.My understanding, which may be flawed, is that if one makes an early withdrawal from an IRA, the 10% penalty is waived - or at least mitigated - if the funds were from a Non-Deductible contribution. True?If true, then it gets interesting.. well, more complicated anyhow.My wife was laid off several years ago when the company she worked for was bought out. A consequence of the buyout was the original company having to assign a "real" value to the shares of stock in a heretofore private company - she'd been participating in an ESOP program - which she gave me to understand wasn't supposed to be worth anything until retirement. A consequence of being laid off, was that the value equivalent to her "shares" was put into an IRA account for her. Given that it was considerably more than the $2000 (like 20 times more) one can contribute in a year, does that mean it was a non-deductible contribution - and given THAT - was the early withdrawal we had to take last year indeed subject to the 10% penalty?Many thanks - in advance - for any light anyone can shed on this!Cheers, Patrick & Chris
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