Net Unrealized Appreciation

Net Unrealized Appreciation and Other Special Tax Rules If you participate in a 401(k), ESOP, or other qualified retirement plan that lets you invest in your employer's stock, you need to know about net unrealized appreciation — a simple tax deferral opportunity with an unfortunately complicated name. More Details What Is a Lump-Sum Distribution? In general, you're only allowed to use these favorable NUA tax rules if you receive the employer securities as part of a lump-sum distribution. More Details NUA Is for Beneficiaries and Heirs, Too If you die while you still hold employer securities in your retirement plan, your plan beneficiary can also use the NUA tax strategy if he or she receives a lump-sum distribution from the plan. The taxation is generally the same as if you had received the distribution yourself. The stock won't receive a step-up in basis, even though your beneficiary receives it as a result of your death. More Details Advantages and Disadvantages of NUA Treatment It's important to understand the advantages and disadvantages of net unrealized appreciation treatment before taking a distribution of stock from an employer retirement plan. More Details Some Additional Considerations Some additional things to think about before deciding. More Details