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You wrote, Sorry, but this is not completely true when it comes to 401(k) plans and employer profit sharing plans. These plans have a feature of being able to withdraw company stock with "Net Unrealized Appreciation" (NUA) and paying ordinary income tax (and any appropriate penalties) on only the basis of the stock. When the stock is sold, the profit over and above the basis will be taxed as a capital gain, rather than as ordinary income. At least for now, capital gains tax rates are generally lower than ordinary income rates, so this could result in fewer taxes being paid, especially if there is a low cost basis for the company stock.

You're right. I'd forgotten about that.

- Joel
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