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About John Stancil, CPA
Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Society of Tax Professionals, and the Institute of Management Accountants.
Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper.
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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > ESOP / 401K
Expert: John Stancil, CPA
Date: 10/6/2008
Subject: ESOP / 401K
Question
I recently left an ESOP company after 10 years. At the time I was leaving, I found out that they had converted my stock to a 401K. I am confused because there was never anything mentioned about this stock being tied to my retirement. I this a standard practice, or do I have options to fight the transfer? I would prefer to control the investment of that money rather than deal with all the restrictions tied to the 401K?
Thank you for you help and assistance on this!
Answer
Steve,
Thanks for your question.
Although plans differ significantly, it is not uncommon for an ESOP to be structured as a qualified retirement plan. Upon separation from the company, several things can happen to the stock depending on the terms of the plan.
It would appear that your plan automatically converts the stock to a 401(k). Since it was likely a qualified retirement plan from the beginning, there is probably not much you can do.
You can, however, roll the 401(k) into an IRA which gives you more control.
Hope this helps.
John Stancil, CPA
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