Company bought out... ESOP payout questions

[Guest Spindle]

My company was bought out for 3x the value of the quoted value of the ESOP stock.

I am not choosing to roll this into an IRA, I will instead be going for some instant satisfaction.

The question I have, is what should I expect to be paying to the IRS?

I understand that I may be charged 10% for not choosing to roll to the IRA, but come tax time, what should I expect? Will this money be considered a corporate dividend or will I need to claim it like regular salary?

[mbozek]

You need to hire a tax advisor to determine your options. If your co is bought out in a stock deal then you will receive stock of the purchaser in exchange for your employers stock. In order to recieve the 15% capital gains on the er stock you must receive a lump sum from the ESOP on account of termination of employment or attaining 59 1/2, not on account of termination of the plan. Getting capital gains on er stock is very complicated and you need to spend the money on a tax advisor.