Company Stock Distribution (NUA)

Company Stock Distribution — NUA Strategy

Net Unrealized Appreciation (NUA) lets you distribute employer stock from your 401(k) and pay ordinary income tax only on the cost basis — then long-term capital gains on the appreciation.

Inputs

Cost basis of company stock ($)

Fair market value at distribution ($)

Years held before sale

Expected annual return (%)

Ordinary income tax rate (%)

Long-term capital gains rate (%)

Results

NUA strategy — net after-tax

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Rollover to IRA — net after-tax

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NUA advantage

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Tax on basis (ordinary)

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Tax on NUA + growth (LTCG)

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NUA requires a lump-sum distribution in a single tax year following a triggering event (separation, age 59.5, death, disability). Only basis is taxed as ordinary income at distribution; appreciation gets long-term capital gains treatment.