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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121333  
Subject: Re: Company stock in 401(k) Date: 9/27/2004 7:29 AM
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So if theres a "trick" you don't have to worry about it. (I don't think there is a trick though)

Actually, there is a trick with company stock and 401(k)'s. Actually, a couple. First, you can elect to have dividends distributed penalty-free while you're working.

Second, when you leave the company you can take the stock as a distribution and not pay tax (immediately) on the Net Unrealized Appreciation (NUA). The NUA is the difference between what you paid for the stock and what it's worth at distribution. It's a way of turning what would otherwise be ordinary income into a long-term capital gain.

Details are in IRS Publication 575, and I think there's an article in the Retirement section of the Fool ("Taking Stock"?).

Phil
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