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jmbellv --- Yes, the same applies to investments held in a 401K. You only get taxed when you start withdrawals as ordinary income. However, you can rollover the 401k either partially or entirely into an IRA. If you choose a self directed IRA, the stock can be rolled over as well (check out Vanguard, Fidelity, TDWaterhouse for self directed IRAs). you should also consider taking the stock as an "in-kind" distribution whereby you keep the stock in a taxable account and only pay a tax on the cost basis of the stock when you receive it as a 401K distribution.
Your company 401k plan administrator can help you out with this. In this case, the capital gains are taxed at your caital gain rate when you decide to sell some. I found this approach useful when I rolled over the cash part of my 401k. Good luck --- gopete
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