Message Font: Serif | Sans-Serif
 
No. of Recommendations: 3
If a penalty, then could he just roll that over to an IRA to avoid the penalty?
------------------
Yes. Doing a direct transfer would also avoid the withholding.
-------------------
If no penalty, I would think that paying the taxes on it now and putting it in his Roth IRA would be a better choice for him.
--------------------
That sounds best to me too, given his low current tax rate.


Maybe something isn't coming through correctly on the translation. Since there is a penalty, how would it sound best to you?

It seems that the best route would be to do a rollover to a traditional IRA, then convert the traditional IRA to a Roth IRA due to his current low tax rate. That may be what you are saying but it was confusing in how it was worded.

PSU
Print the post  

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.
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 Glassdoor #1 Company to Work For 2015! 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