Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I recently withdrew some money from my 401(k) account. The account had been transfered to TRowe Price when I retired from my job last year (I am over 59 and 1/2). I am wondering what the tax consequences of this distribution are. Is it subject to income tax? If so, what portion is?
Print the post Back To Top
No. of Recommendations: 1
Since the money was not taxed when it was contributed to the plan, all amounts withdrawn from a 401k Plan are subject to regular income tax. If the account was tranfered to T> Rowe Price as an IRA, there are no tax consequences until you withdraw money from the IRA. Whatever amount is withdrawn from your 401k or IRA will be added to your taxable income for the year it is withdrawn. Normal Federal and State tax rates apply. Since you are over 59 1/2 there are no additional penalties for the withdrawal.
hope this helps, if not, please follow up.

Bill
Print the post Back To Top
No. of Recommendations: 0
Thanks. So, I assume that this amount will be taxed as ordinary income and not as a capital gain? I have capital losses I would like to offset, but I am not sure if any part of this 401(k) distribution will qualify as capital gain. Thanks again.
Print the post Back To Top
No. of Recommendations: 0
Hello almosrie:
So, I assume that this amount will be taxed as ordinary income and not as a capital gain?

Yes, that's correct, taxed as regular income, as Bill stated.

Bookm
Print the post Back To Top