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    rono4's Avatar
    rono4 Posts: 2, Reputation: 1
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    #1

    Sep 30, 2010, 12:22 PM
    Transfer of assets. I transferred $10K from 401K to a failed busiess. Do I owe taxes
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,503, Reputation: 4600
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    #2

    Sep 30, 2010, 12:41 PM

    If you withdrew money from a 401k, yes, it is taxable. Where you put the money does not matter.

    Your age matters. How old are you?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Oct 1, 2010, 12:31 PM
    By age, JudyKayTee means 59.5 years of age.

    If you were younger than 59.5 when you transferred the money, you will owe state and federal income tax PLUS a 10% Early Withdrawal Penalty. That 10% Early Withdrawal penalty CANNOT be mitigated by other deductions, so you WILL pay at least 10% on the withdrawn 401K money.
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