Need some comment for accountants or finance people

[chinaco]

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.

[FinanceDude]

Quote:

Originally Posted by chinaco 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.......

[boutros]

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.

[two4theroad]

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

[clifp]

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.