JAS Financial Services, LLC
Joseph A Smith, CPA/ PFS, JD, AEP®
Member
1603 Orrington Avenue
Suite 600
Evanston, IL 60201
847-328-8011
Fax 847-780-7920
joe@jasfinancialllc.com
https://jasfinancialllc.com/
 
 




Net Unrealized Appreciation (NUA) Calculator
Net Unrealized Appreciation (NUA) Calculator

When you receive a lump sum distribution1 from your retirement plan that includes employer stock, you'll need to decide whether to take advantage of special tax rules that apply to net unrealized appreciation (NUA)2. Typically, your options will include (a) electing NUA treatment and selling the stock after a specified holding period3, (b) electing NUA treatment, selling the stock immediately, and reinvesting the net proceeds4, or (c) forgoing special NUA treatment and rolling the distribution over into a traditional IRA.

This calculator lets you compare the after-tax results of these three scenarios.


Information about stock distribution
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*Employee after-tax contributions

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Tax Rates
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Early distribution penalties

For calculating tax on your stock basis. In general, the penalty does not apply if you'll be age 55 or older in the year you terminated employment, or if you're self employed or disabled.

For calculating tax on your IRA distribution. In general, the penalty does not apply if you're age 59½ or older when your IRA is paid out. Other exceptions--for example, disability--may also apply.

1A lump sum distribution is generally a distribution, within a single tax year, from all your employer's qualified plans of the same type. The distribution must be paid after you reach age 59½, or as a result of your separation from service (if you are an employee), or permanent disability (if you are self-employed), or death.

2In general, if NUA tax treatment applies, your stock's cost basis is taxed currently at ordinary income tax rates. Any unrealized appreciation at the time of distribution from the plan (NUA) is taxed at long-term capital gains rates when you sell the stock (regardless of how long you hold the stock). Any additional stock appreciation in excess of NUA is taxed when you sell the stock at long-term or short-term capital gains rates, depending on your holding period. (This calculator assumes that any additonal stock appreciation will be taxed at long-term rates.)

3For scenario (a), the calculator assumes you will sell enough shares of stock to pay the immediate income taxes due on the stock's cost basis.

4Scenario (b) assumes you reinvest the proceeds in a capital asset that you sell at the end of the holding period.



The foregoing is provided for information purposes only.  It is not intended or designed to provide legal, accounting, tax, investment or other professional advice.  Such advice requires consideration of individual circumstances.  Before any action is taken based upon this information, it is essential that competent, individual, professional advice be obtained.  JAS Financial Services, LLC is not responsible for any modifications made to this material, or for the accuracy of information provided by other sources. 

This communication is strictly intended for individuals residing in the state(s) of IL. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.