Net unrealized appreciation allows for favorable tax treatment of withdrawals of an employer's stock - but understanding the rules is crucial.
Of all the various ways to reduce one’s taxes in retirement, net unrealized appreciation (NUA) is often misunderstood or overlooked altogether. The rules may be complicated, but a plan participant who owns company stock and is separating from service or retiring should be aware of NUA before rolling his/her retirement account into an IRA or a new employer’s plan.
Net unrealized appreciation of employer stock held in an employer-sponsored retirement plan permits gains that occurred inside the plan to be taxed outside the plan (e.g., brokerage account) at preferential long-term capital gains rates.[+] Read More