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View Full Version : Early withdrawal Stock Pension Plan -NUA Method


KitKit
Aug 15, 2007, 02:32 PM
If if I take an early withdrawal from a qualified pension plan (consisting of all company stock), that was awarded over several years can I use the NUA method for computing tax requirements. For example if I had 100,000 in company stock with an average cost basis of 20,000, would I pay capital gains tax on 80,0000 or income tax 100,000? Also would I owe a 10% penalty on the full amount

AtlantaTaxExpert
Aug 16, 2007, 09:12 AM
First, ANY withdrawal from a qualified pension plan IS subject to the 10% Early Withdrawal Penalty unless it meets one of the exceptions specified under the Internal Revenue Code.

Second, capital gains is NOT a consideration for such distributions from a qualified pension plan. The money, whenever it is distributed, is taxed as ordinary income.