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Subject:  Re: Early Retirement Package Date:  8/25/1999  10:59 AM
Author:  buznitz Number:  13435 of 103331

Hey Pixy:

We all need to read IRS Publication 575 page 20,21,22.
The rules are convoluted. Transfer to an IRA is NOT a lump sum distribution. Unless one withdraws entire 401K one cannot defer the LTCG of the stock portions NUA. If stock is transferred to an IRA you lose the LTCG advantage even though you defer taxes until you sell stock(but it becomes ordinary income). I thought about taking a lump sum from ALL of my employer's 401K account and doing long term averaging without including the stock portion NUA(only paying taxes on the cost basis of the stock and deferring LTCG until the stock is sold). The tax bite using 5 or 10 year averaging was too large for me to swallow. Either way the tax man cometh
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