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When I retired I left my 401K intact because I was comfortable with my investment options and my ability to withdraw money without paying a 10% penalty, since I was 55 when I retired. I have decided to move the company stock that was provided by the company match into some of the other funds within my 401K, since it makes up over 30% of the value. I just want to make sure I understand the tax implications before hand. In doing some investigating on this board, this is the way I understand it so far.

1. If I move the money into the other funds I will pay no tax at this time but will pay ordinary income tax when I draw out the money.
2. If I have them send me the shares and I hold them for 1 year I will pay ordinary income tax on the cost basis and long term capital gains on the amount over the cost basis.

What I'm not sure of is what are the tax implications if I have them sell the stock and send me the money. Do I pay ordinary income tax on the whole amount? They also said there were different tax implications on stock I received prior to 1990. Does anyone know what these are? Please help.

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