Investors that own employer-issued stock in a 401(k) plan may benefit from favorable tax treatment under the NUA rules. But, to qualify for an NUA distribution, you must satisfy several very important rules, some of which are often misunderstood.
This flowchart addresses some of the most common issues that arise for individuals thinking about doing an NUA distribution. This flowchart considers:
- What type of stock qualifies
- Triggering events that must be satisfied
- Timing considerations
- Tax impact of cost-basis and gains
