Video FAQ: What is a Net Unrealized Appreciation Strategy & Is It Right for Me?

Video FAQ: What is a Net Unrealized Appreciation Strategy & Is It Right for Me?

We’ve been getting a lot of questions regarding Net Unrealized Appreciation (NUA) strategies. This video reviews the basics of NUA as well as some practical examples.

  • NUA Quick Facts:
  • Net Unrealized Appreciation (NUA) is applicable when you have a highly appreciated company stock in a 401(k)
  • You can pull that stock out of the 401(k) and transfer it to your brokerage account (a non-retirement account)
  • You do pay ordinary income taxes on what you paid for the stock (your cost basis), but all the gains become taxed as capital gains at the time you sell the stock

NUA Eligibility:

To qualify for the favorable tax rules of NUA strategy you must:

  • Have employer securities in a qualified employer-based retirement account
  • Take a lump-sum distribution from a retirement account as a result of a separation from the company or reaching age 59 1/2
  • Take a direct contribution of stock from the plan

We invite you to watch the video to learn more, and if you have questions, please reach out to us directly.