Originally Posted by panacea
Wow, that's great news! Sounds like a great opportunity. Just had one other thought... if you're under 59 1/2 I'm pretty sure the distribution is subject to a 10% penalty. Don't know how old you are and I'm not saying it's still not worth taking the NUA treatment... just a thought.
I did not know this at the time but learned it as I was preparing my income tax return the following year: The 10% penalty applies only to the cost basis
of the company stock, not the NUA itself. This was a hugely pleasant surprise for me because the NUA in my case was about $288k and the cost basis was about $10k, making the penalty only $1k, not $30k.
The presence of the large NUA, even though it was taxable at the 15% LTCG rate (this was back in 2008, before it got raised for higher incomes), triggered the AMT for the relatively small remainder of my income, costing me about $5k more in federal income taxes. Still a mere bag of shells compared to the $29k of "found" money from not paying any 10% penalty on it.