Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Here is a question that I just read about and would like to understand better.

I am a participant in a 401(k) plan. Part of what I invest in is stock of my employer. For this discussion we will use the following:

I have 100 shares of stock.
I paid $5.00 per share for those 100 shares.
The value per share at the time of my retirement is $25.00

Now for the questions

If I roll the 401(k) money over into an IRA will all of value of the 401(k) be taxed as ordinary income?

If I take the stock out as stock when I retire and do not put it into an IRA what would my basis then be in the stock and how much would I pay taxes on? Would it be taxed at ordinary or Capital gains (short or long term as appropriate) rates?

If I leave it in the 401(k) and the value goes up to $45.00 and I die how is it taxed (ordinary, long term, etc.)?

Hope I stated this clearly. Thanks for all your help

Zeb and Hildegarde
(Out in the country)
(Right next door to the Ziffles)
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.