Discussion:401K to IRA problem
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
(Difference between revisions)
Revision as of 00:26, 15 January 2008
Discussion Forum Index --> Basic Tax Questions --> 401K to IRA problem
Discussion Forum Index --> Tax Questions --> 401K to IRA problem
| 15 January 2008 | |
| I have a client that lost his job after age 55. He took part of his 401K free of the 10% penalty due to the loss of job after age 55. The remaining 401K money was rolled into an IRA. Low and behold, just days before he turned 59 1/2 he took the rest of the money (originated in 401K) from the IRA. Now the IRS is insisting that the 10% penalty applies and my client is in shock. In his mind, it is the same money the year before that was exempt from the penalty. IRA's do not have a job loss after age 55 provision like the 401K. The client is caught in a technical snafu and I would like to find a way out of it. Had he taken it from the 401K, no penalty. Had he waited a few more days until age 59 1/2, no penalty. Is there any possible solution to this very unfortunate set of facts? | |
