[Fido969]

It is illegal to put into a retirement account of any type capital gains. Moneys entered into a retirement account has to come from earned income from labor (nothing else).

Blah Blah. But the INVESTMENTS in the account can be capital gain items. You can put COMPANY STOCK into your 401(k) plan as a type of deferred compensation.

[baluga]

You don't know what you are talking about.
Stocks can be put in, to the limits set by IRS, and have to be put in at their MARKET VALUE.

I am doubtful that if he used company stock they were put in at their true market value, this is precisely what I mean by Gray area

Your blah blah does not add anything to the discussion and if you are ignorant about the subject matter, please stay home and don't try to add smoke so that others Will not see what are the true issues.