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Posted by mark4man on July 28, 2008, 4:01 pm
[b]Hello...[/b]
In addition to my 401K I have set up thru my employer...I have an
Oppenheimer Mid-Cap & a Roth IRA set up w/ PNC Investments. Several years
ago, my broker (now retired) told me my contract stated I could cash out
for a mere 1% hit (for both ventures).
Now...my wife (a bookkeeper) is telling me there are government penalties
& all sorts of other nonsense.
I want to cash out these two accounts & buy a bungalow in town, which I
want to convert into a recording/mastering studio.
So...what's the real story? How much do I lose if I cash out a Roth & a
Mid-cap?
Thanks,
[b]mark4man[/b]
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Posted by Chip on July 28, 2008, 5:10 pm
mark4man wrote:
> I want to cash out these two accounts & buy a bungalow in town, which I
> want to convert into a recording/mastering studio.
>
Very little to do with financial, but be aware that setting up a sound
studio in a bungalow in TOWN is fraught with potential problems,
noise-level wise. One man's music is another's noise!
The bungalow is almost assuredly not set up to contain the SPL's usual
encountered and the neighbors might be a little miffed. And even the
police can become involved with ordinance violations. Noise does not
respect property lines. To convert a town bungalow to a good neighbor
will take a major $$$$$ renovation. Then add on the interior treatment
required (more $$$$$) to cut reflections and get an adequate recording
environment. Just to include some financial advise.
Been there, done that, got the t-shirt!
Chip
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Posted by joetaxpayer on July 28, 2008, 5:55 pm
mark4man wrote:
> [b]Hello...[/b]
>
> In addition to my 401K I have set up thru my employer...I have an
> Oppenheimer Mid-Cap & a Roth IRA set up w/ PNC Investments. Several years
> ago, my broker (now retired) told me my contract stated I could cash out
> for a mere 1% hit (for both ventures).
>
> Now...my wife (a bookkeeper) is telling me there are government penalties
> & all sorts of other nonsense.
>
> I want to cash out these two accounts & buy a bungalow in town, which I
> want to convert into a recording/mastering studio.
>
> So...what's the real story? How much do I lose if I cash out a Roth & a
> Mid-cap?
The 'mid-cap' is what? Just a post-tax brokerage account? Right? Not an
IRA of any kind. You are how old? And are in what tax bracket?
The mid-cap account as you call it may have tax due upon sale or it may
be a loss. Any idea what he cost was, and what it's worth now?
The Roth, was from deposits or a conversion?
If deposits, you can take the deposits out with no penalty, if
conversion, it needed to age 5 years or age 59-1/2 whichever comes
second, I believe.
The exact details are needed to give you answers that make any sense.
It can go either way, depending.
Joe
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Posted by Elle on August 15, 2008, 12:50 pm
> The Roth, was from deposits or a conversion?
> If deposits, you can take the deposits out with no
> penalty, if conversion, it needed to age 5 years or age
> 59-1/2 whichever comes second, I believe.
To avoid both a penalty and taxes, one can take the
conversion amount (sans earnings) out after five years
regardless of age, no?
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Posted by joetaxpayer on August 15, 2008, 1:52 pm
Elle wrote:
>
>>The Roth, was from deposits or a conversion?
>>If deposits, you can take the deposits out with no
>>penalty, if conversion, it needed to age 5 years or age
>>59-1/2 whichever comes second, I believe.
>
>
> To avoid both a penalty and taxes, one can take the
> conversion amount (sans earnings) out after five years
> regardless of age, no?
I think you are right, Elle, my mistake above.
Deposit - can be withdrawn anytime
Conversion - needs to age five years
To remove gains without penalty, one must be 59-1/2, disabled or 72t(?).
That sound right?
Joe
www.blog.joetaxpayer.com
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