A 45 year old German citizen, working for 6 years in the United States on a working visa, contributed a percentage of his salary to a 401k plan sponsored by his employer while working in the US. He left the United States in 2010 to return to Germany, a country with a higher income tax rate and capital gains tax rate than the US. Foreign income earned in a foreign Country is not taxable in Germany.

He left the retirement fund intact in the United States after leaving the country. If he were to withdraw the retirement contributions now (2013) at the age of 45, would the withdrawal of the contributions be taxable? Would the 10% Penalty apply? Would the capital gains on the original contribution be taxed? Would the personal exemption and Standard dedcutions apply? Must he file, and what forms must he file?