Can I Do A Net Unrealized Appreciation (NUA) Distribution?
If you own employer-issued stock in a 401(k) plan, you may benefit from favorable tax treatment under the NUA rules. But, to qualify for an NUA distribution, you must satisfy several very important rules, some of which are often misunderstood.
To help make this analysis easier, we have created the “Can I Do A Net Unrealized Appreciation (NUA) Distribution?” flowchart. It addresses some of the most common issues that arise if you are thinking about doing an NUA distribution. This flowchart considers:
What type of stock qualifies
Triggering events that must be satisfied
Timing considerations
Tax impact of cost-basis and gains
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Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.