ESOP Questions

[Guest DougT]

Here's my situation:

I worked for a company for 5 years and made contributions to their 401K that were matched in an ESOP plan. I was laid off about 15 years ago and left the 401K there.

Recently I decided to rollover part of the 401K as the amount was rather large and began to initiate a rollover but was told by someone that I should never do this with ESOP money. The amount that was in was about 95K; the part that I contributed was $5,720.00, and the rollover was a partial distribution of 40K. A check was issued to a financial planner under my name and he put it in a "qualified account" (money market) and is waiting for instructions on what to do with it.

After looking into ESOP and "net unrealized appreciations" I'm becoming aware that it would be advantagous for me to instead take this partial distribution and transfer it to a taxable brokerage account. I would only be taxed and penalized on the 5,720.00 and the rest would only have a capitol gain tax applied to it whan I touch it.

Can someone give me some info on what I should consider doing with this partial distrubution and the rest that is still in the ESOP 401K?