If a company undergoes an acquisition can an employee withdraw 401(k) funds tax free?

By Denise Appleby AAA
A:

Although the participant may be eligible to withdraw the funds if a plan is terminated as a result of an acquisition or other similar transaction, this does not mean that the 10% penalty will be waived. However, the participant would qualify for an exception if he/she meets any of the requirements as listed under the Tax Code. Please see Page 29 of IRS Publication 575 for a list of exceptions.



For more insight, read Tough Times ... Should You Disturb Your Qualified Plan's Assets?



This question was answered by Denise Appleby
(Contact Denise)



RELATED FAQS

  1. Should I purchase a master limited partnership (MLP) in my retirement account?

    Learn why investors may have to pay taxes on dividends from master limited partnerships, or MLPs, held in individual retirement ...
  2. How can a company resist a hostile takeover?

    Learn about some of the defense strategies a public company's board of directors might employ to prevent a hostile bidder ...
  3. How does a letter of intent work in the context of mergers and acquisitions?

    Learn how a letter of intent works for a merger and acquisition deal and the types of provisions that can be included in ...
  4. What happens to the shares of a company that has been the object of a hostile takeover?

    Learn about the effect on the share price of companies that are targets of hostile takeovers, which are tactics used by famed ...
RELATED TERMS
  1. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  2. Value Of Risk (VOR)

    The financial benefit that a risk-taking activity will bring ...
  3. Business Judgment Rule

    A legal principle which grants directors, officers, and agents ...
  4. Freelancer

    A freelancer is an individual who earns money on a per-job or ...
  5. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative ...
  6. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...

You May Also Like

Related Articles
  1. Mutual Funds & ETFs

    This Gold ETF is Fine for Traders, Not ...

  2. Investing News

    A New Corporate Governance Initiative ...

  3. Mutual Funds & ETFs

    Should GE Be Part of Your Portfolio?

  4. Retirement

    Top 10 Stocks for Retirement Portfolios

  5. Chart Advisor

    3 Basic Material Stocks Poised For A ...

Trading Center