The withdrawal of 401-K and employee stock ownership (ESOP) funds would both be taxable events. That is why they withheld taxes on the distribution. You should receive a form 1099-R reporting the 401-K distribution. A portion of the ESOP withdrawal will likely be reported as income in the box 1 entry on your W-2 form. You should also receive a form 1099-B reporting the stock sales. You need to be careful to make sure the income reported on your W-2 is not duplicated on your form 1099-B. Often you need to increase the cost basis reported on your form 1099-B by the income associated with the ESOP sale reported on your W-2 form.
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