fhb@hou2f.UUCP (F.BUTLER) (09/25/84)
< "Its money that I love" - Randy Newman (and others)> I would like some advice as to the different methods I can use for my company savings plan investments with regards to taxes. The plan matches 2/3 of my investment (up to a certain % of my salary) as long as I leave the money in for 3 years. There are different investment options including company stock, a stock mutual fund, guaranteed interest (annuity), and government type investments. I have not made any withdrawals yet. One strategy I know of and am following is to pay taxes on the money invested in the plan. Upon withdrawal, I will not pay any taxes until my withdrawals exceed my contributions. Question, when I reach this point, is this money taxed as a capital gain or as ordinary income? Does it make a difference according to which investment option I was in? Along these lines, if I receive a distribution of stock shares as opposed to cash, does this make a difference in what is taxable and at what rate? I would also appreciate any help with the above questions and any information on other strategies that can be used with savings plans of this type. Ideally I would like to defer taxes on the money invested until I withdraw it to take advantage of the earning power of the money I'm currently paying in taxes. One last comment, please try to keep the suggestions within the law or at least questionable legality. Thanks, Tim Tierney