Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Need some comment for accountants or finance people
Old 08-27-2007, 04:19 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Need some comment for accountants or finance people

DW has some company stock. When she takes her ER package at age 51, it is my understanding that she can take advantage of NUA (Net Unrealized Appreciation). There is a huge tax advantage.

Do any of you have any personal experience with using NUA. Is this something that we can do no our own or do we need to hire a tax accountant? I am just trying to figure out how to proceed and understand the restrictions and how to navigate it.

Thanx in advance.
__________________

__________________
chinaco is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-27-2007, 08:34 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by chinaco View Post
DW has some company stock. When she takes her ER package at age 51, it is my understanding that she can take advantage of NUA (Net Unrealized Appreciation). There is a huge tax advantage.

Do any of you have any personal experience with using NUA. Is this something that we can do no our own or do we need to hire a tax accountant? I am just trying to figure out how to proceed and understand the restrictions and how to navigate it.
Thanx in advance.
This is one of those times when a good CPA or tax attorney would be invaluable. Go see one.......
__________________

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 08-27-2007, 08:47 AM   #3
Recycles dryer sheets
 
Join Date: Jul 2005
Posts: 113
basics -
*Income tax (with 10% penalty) on cost basis of company stock.
*No tax on appreciation until it is sold. Then at normal capital gains rate.
*Any additional gains start aging from date of distribution.
*It is no longer in a retirement account.

Most people use this for estate planning, charitable giving, or if they need a lump sum out of a retirement plan. If you think that this might be of benefit see a CPA or fee only planner with a tax background who is familiar with the company's plan.
__________________
boutros is offline   Reply With Quote
NUA procedures
Old 08-27-2007, 09:57 AM   #4
Recycles dryer sheets
two4theroad's Avatar
 
Join Date: Aug 2006
Location: Texas
Posts: 216
NUA procedures

I am dealing with this issue too. Because she is under 59.5 there will be a 10% penalty on the cost basis as well as the taxes owed. All of the 401K must be rolled out within the same year. The company stock goes into a brokerage account and the rest of the account can be rolled to an IRA. Great care must be taken that all is done properly. I am talking with a CPA as well as Vanguard (destination) and Merrill Lynch(401K plan).
2fer
__________________
Women and cats will do as they please, and men and dogs should relax and get used to the idea.<br />-Robert A. Heinlein
two4theroad is offline   Reply With Quote
Old 08-27-2007, 07:58 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
I did this 7 years ago. I am foggy on the details, but i don't remember it being overly complicated. The company figured out the cost basis of the stock and reported it on my W2.

Compared to the complexities of dealing with K1 for MLPs and such or rental properties it was a piece of cake.
__________________
clifp is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
I heard 5 people get shot last weekend Keim Other topics 4 05-21-2007 05:46 PM
More behavioral finance Martha FIRE and Money 21 10-27-2006 09:40 PM
WHAT RETIRED PEOPLE DO sgeeeee Life after FIRE 13 03-29-2004 08:43 AM
What do you tell people you do? farmerEd Life after FIRE 49 03-11-2004 10:30 AM
I would like to see more people posting ShokWaveRider Other topics 57 02-10-2004 05:08 AM

 

 
All times are GMT -6. The time now is 01:19 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.