Net Unrealized Appreciation (NUA) Explained

If you have built up company securities within your employer-sponsored retirement plan, you may find yourself with a range of choices when the time comes to take a distribution. If those securities have experienced appreciation, it's worth considering the potential benefits of utilizing the net unrealized appreciation (NUA) tax treatment.

还记得, this article is for informational purposes only and is not a replacement for real-life advice. Make sure to consult your tax professional to get more detailed information on any company stocks you may own and how unrealized appreciation may be used.

What is the Net Unrealized Appreciation Rule?

Net unrealized appreciation is actually a pretty simple concept, but the execution can be difficult to understand. If you choose to invest in your company's stock and the stock increases in value over time, the difference between the original cost basis (the price at which the stock was purchased) and the current market value of the stock is the NUA.¹

例如, if you were issued employer stock at $20 per share and it is now worth $50 per share, you would have an NUA of $30 per share ($50 - $20 = $30).¹

To qualify for the tax treatment associated with NUA, the distribution must meet the criteria for a lump-sum distribution.¹

• Within one taxable year of the recipient;
• Has to be in the person's account at the time of the transaction;
• From a qualified pension, profit-sharing or stock-bonus plan, which becomes payable to the recipient
  • on account of the employee’s death;
  • 雇员年满59岁半后;
  • on account of the employee's separation from service, or;
  • after a self-employed individual has become disabled.

NUA的缺点

The NUA strategy may not always be the best choice. 以下是一些原因:

1. 集中风险: You may already have employer stock through other forms of equity compensation. Adding more to your portfolio may not be appropriate, despite tax considerations.
2. 税收的影响: 税es should always be considered when making financial decisions, but they shouldn't be the only factor. 税法可以改变, so consider working with a tax professional who can keep you up to date with the new rules.^2,3
3. No step-up in basis on NUA portion at death: 当某些资产被继承时, they receive a step-up in basis to the market value on the date of death. However, when NUA is inherited, it does not receive a step-up in basis.

1. Ameriprise.2023年4月
2. 《赌博手游下载》.2021年9月8日
3. 吉卜林.2022年4月26日

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