calvert@ut-sally.UUCP (Ken Calvert) (03/17/86)
I recently received a lump-sum distribution from the
Employee Stock Ownership Plan of my former employer.
The company informs me I have 60 days to roll over the
entire amount into another "retirement" plan or an IRA, or
I suffer the (Tax) consequences. My question is, how can I roll
over the stock shares? May I sell them and put the money into my
Mutual Fund IRA? If so, will I be liable for capital gains
on the proceeds above the basis value? If I don't want to sell
the stock, is there any way to turn it over to a trustee and just
designate the shares as an IRA? If so, who could serve as such a
trustee?
opinions, pointers, comments appreciated.
Ken Calvert
calvert@sally.UTEXAS.ARPA
{ihnp4,seismo}!ut-sally!calverthlb@sally.UUCP (03/19/86)
If you wish to retain the stock then the best option is to open a self- directed IRA at a brokerage firm. That account would be opened as a ROLLOVER account and should be maintained separately from any CONTRIBUTORY account that you may have. Once the securities are in the IRA you are free to sell them and avoid any capital gains. Of course, at the time of distribution from the IRA; at the proper age; all distribution from the IRA is taxable at your then tax rate. Of course, once the stock is in the IRA you may wish to hold onto it if you feel it will go up, if it pays good dividends or you expect a split, etc. Alternatively, if you perceive a market shift then you may wish to move from the stock position to an alternative investment. You cannot, however, sell the stock on the street, take the cash and put that into your current IRA because that would trigger a capital gain. A point to remeber: If you retain the stock and it drops then you cannot deduct a capital loss on your taxes. Hope this helps.
johnl@ima.UUCP (John R. Levine) (04/01/86)
Can you roll stock over into an IRA? I rolled over a cash pension distribution
a few years ago into a self-directed stock IRA, and at the time while reading
all of the fine print I got the distinct impression that you can only transfer
cash into and out of an IRA.
Am I wrong? Has anybody actually moved stock into an IRA without selling it,
moving in the cash, and repurchasing it? Facts only, please.
--
John Levine, Javelin Software, Cambridge MA +1 617 494 1400
{ decvax | harvard | think | ihnp4 | cbosgd }!ima!johnl, Levine@YALE.ARPA
The opinions above are solely those of a 12 year old hacker who has broken
into my account, and not those of my employer or any other organization.