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    earltrombone's Avatar
    earltrombone Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Aug 20, 2008, 12:43 PM
    401K Special circumstance
    Hello,

    My employer is a publicly traded company in which all of my 401k stocks are invested. They are being bought out by a private company who is paying out on all our stocks. If I opt to take the cash out on my 401K under these circumstances how much will it cost me in penalties and taxes?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Aug 20, 2008, 12:45 PM
    Same as any cash out. You will pay 10% in penalities and the full amount you cash out will be added to your taxable income to determine your tax liability.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #3

    Aug 21, 2008, 10:04 AM
    Why do you want to take the cash out of your 401(k)? Even though company stock is no longer available as an option in the plan, you should still continue to build your 401(k) assets.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Aug 21, 2008, 01:05 PM
    To further expand on ebaines excellent points, if the 401K is being shut down, you cand and SHOULD roll the money over into a rollover IRA.

    Virtually every bank, mutual fund and brokerage firm will be more than happy to help you with this process.
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