Guest RoBuck Posted July 17, 2000 Share Posted July 17, 2000 As I retire from contributing to a 457 deferred compensation plan, what tax liabilities do I face in cashing out? Is the total withdrawal amount considered current income in this year? Two thirds of the total amount is the result of investment capital gain - would that be taxed at the capital gains rate? Are there advantages to taking, say, three years to withdraw the total funds ? Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted September 23, 2000 Share Posted September 23, 2000 I'm afraid that the entire amount is ordinary income. That is true even with respect to the part derived from long-term capital gains. The only advantages to taking three years to withdraw the funds are that (a) the tax is deferred with respect to the portion of the amounts as to which the distribution is deferred, and (B) this can in some instances prevent a spike in income from pushing you into a higher tax bracket. Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
jlf Posted September 24, 2000 Share Posted September 24, 2000 Wait....the Senate is about to vote on the RSSA of 2000. If this bill becomes law you will be able to rollover your DC account to an IRA!!!! This would be just grand for you guys and gals. Best wishes, Joel L. Frank Link to comment Share on other sites More sharing options...
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