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Can sister take out 50,000 in stock without paying a penalty

Tampa, FL |

My sister has $50,000 in stock...she is 39 and had became disabled is there any other way she can take her money out without being charged a big fee by IRS?

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Attorney answers 3


I changed the category to tax because I think you are more likely to get a useful answer. I don't know a lot about this, but if this is just straight stock, she can sell it and only pay, I believe, any capital gains tax, whereas if it is in any kind of tax sheltered vehicle, like a 401K, then she would have to pay, I believe, a penalty. She needs to talk to a tax lawyer or an accountant, and be more specific about exactly what it is she wants to do. She may also want to consider the possibility of taking a loan against the asset if that would be more useful to her financially. She is basically borrowing from herself, and that can be a good thing.

***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ******

Heather Morcroft

Heather Morcroft


She also needs to look at SSDI/SSI (Social Security Disability programs - if she has worked SSDI, if she has not SSI) and any private or employer provided disability insurance she may have to see about income from those sources.


There are many possibilities but they all are dependent on the details of the transaction. What she paid for the stock, how long it was held and a number of other factors. Best to contact a tax attorney or give us a call to review where the full details of the transaction options can be discussed and a plan formulated.

Good luck.

Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.


In order to provide you with a quality answer, we would need a great deal more information and that information is not something that you could put on this forum. Visit an estate planning attorney to discuss all the option available. A little advice up front can save a huge amount later.

Disclaimer Information on this site is provided by attorney Clint Curtis as general information and not specific legal advice. Specific advice can only be provided after a complete analysis of all information related to the asker. No attorney-client relationship is established by the use of the information provided. If you have additional questions please contact the law office.

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