About The Guide

As with most IRA and tax strategies, the NUA strategy comes with a few “don’ts.” Any one of these could mean a loss of your ability to take advantage of the NUA tax benefit. In the guide, we cover the 12 things you need to avoid:

1. Don’t forget to consider NUA early when there is highly appreciated stock in an employer plan.
2. Don’t sell the stock too soon in the employer plan. Once it is sold you lose the original basis amount. Unless you can purchase the stock at a lower basis amount, you have lost the NUA opportunity.
3. Don’t roll over the employer stock to an IRA. The rollover is an irrevocable decision and you cannot use NUA on stock that is in an IRA.
4. Don’t take distributions from the employer plan in the years before you want to take advantage of the NUA strategy. Your distribution of the stock in a subsequent year will not qualify as a lump sum distribution.
5. Don’t forget that you can utilize the NUA strategy with only some of the stock in the employer plan. You do not have to use NUA with all the company stock.
6. Don’t forget to make sure that all amounts are distributed from the employer plan by year end. The year-end balance in the plan should be zero.

To get the whole list, and to answer the rest of your questions about this tax strategy, download your guide.