Message Font: Serif | Sans-Serif
No. of Recommendations: 0
My company just merged with another company recently. Now I have the opportunity to do somthing about my money in my 401K plan. Here is a brief summay of my plan:

$40K in company stock with cost basis of $3.3k or 8.3%.
$60K in various funds

My age is in 30s, so I definitely need to pay additional 10% penalty on top of ordinary tax if I take out a distribution.

Here are my questions:

1. I heard that tax and penalty assessed on the cost basis of the stock instead of on the whole amount. This will only cost me about $1155 for withholding. Can some one confirm that?

2. Is it allowed to only take stock portion out and roll the rest over to an IRA or my current company's plan? Seriously thinking about this option but don't know if it is feasible.

Thanks in advance!

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.