Anyone familiar with income tax treatment of net unrealized appreciation (NUA)

[chinaco]

Anyone familiar with the special income tax treatment of net unrealized appreciation (NUA) under Internal Revenue Code (IRC) Section 402(e)4. My wife is in a Profit Sharing Trust with Mega corp. The article below seem to indicate that she could get favorable tax treatment when she reitres.


http://www.fpanet.org/journal/articles/2004_Issues/jfp0204-art7.cfm?renderforprint=1

 

[clifp]

Yup the basic idea is when you leave a company that gives you stock in a 401K (or similar) plan, rather than either selling the stock or rolling it over into a IRA, you have your old company send you the stock certificates. You owe taxes on the cost basis of the stock, (which in most cases will be lower than the fair market value) but when you sell the stock you only owe LT capital gains.

I used it when I left megacorp, and saved several thousand in taxes.

 

[jazz4cash]

try here..........www.72t.net