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Net Unrealized Appreciation (NUA)

Calculate tax savings when taking employer stock as in-kind distribution. Cost basis taxed as ordinary income; NUA taxed at LTCG when sold.

Concept Fundamentals
$68,000
Tax Savings
$400,000
NUA Amount
$117,000
NUA Tax
$185,000
Rollover Tax

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Best when NUA is large vs cost basis Lump-sum required LTCG on NUA when sold

Key figures
$68,000
Tax Savings
Key figure
$400,000
NUA Amount
Key figure
$117,000
NUA Tax
Key figure
$185,000
Rollover Tax
Key figure

Ready to run the numbers?

Why: NUA can save thousands when employer stock has large appreciation.

How: Enter stock value, cost basis, and tax rates. Compare NUA vs rollover strategy.

Best when NUA is large vs cost basisLump-sum required
Sources:IRS Pub 575

Run the calculator when you are ready.

Calculate NUA Tax Savings

NUA Calculator

Employer stock • LTCG vs ordinary • Tax savings

Sample Scenarios — Click to Load

Stock & Tax Details

Total value
$
Original cost
$
Federal rate
%
LTCG rate
%
State income tax
%

Tax Savings: $68,000

NUA: $400,000 | NUA Tax: $117,000 | Effective Rate: 23.4%

NUA Amount

$400,000

NUA Strategy Tax

$117,000

Rollover Tax

$185,000

Tax Savings

$68,000

NUA Analysis

Stock Details

Current Stock Value$500,000
Cost Basis$100,000
Net Unrealized Appreciation$400,000

Tax Rates

Ordinary Income Rate32%
Capital Gains Rate15%
State Tax Rate5%

NUA Strategy

Tax on Basis (Ordinary)$37,000
Tax on NUA (LTCG)$80,000
Total NUA Tax$117,000

Comparison

Rollover Tax (All Ordinary)$185,000
Tax Savings with NUA$68,000

Get AI-Powered Analysis

Get personalized NUA strategy and timing advice.

What is NUA?

  • • NUA: Appreciation of employer stock in 401(k)/ESOP
  • • Strategy: Take stock as in-kind distribution, not rollover
  • • Tax benefit: NUA taxed at LTCG rates, not ordinary income
  • • Requirement: Must be lump-sum distribution

Key Takeaways

  • • Best when NUA is large relative to cost basis
  • • Must meet triggering event requirements
  • • Consider estate planning implications
  • • May want partial NUA strategy

This calculator provides estimates. Consult a tax professional.

For educational and informational purposes only. Verify with a qualified professional.

💡 Money Facts

LTCG

NUA taxed at capital gains

Ordinary

Basis taxed at distribution

Lump-Sum

Required for NUA

401(k)

Eligible plans

📋 Key Takeaways

  • • Best when NUA is large relative to cost basis—LTCG rates vs ordinary income
  • • Must meet triggering event: separation from service, death, disability, age 59½
  • • Lump-sum distribution required—take stock in-kind, not rollover
  • • Consider estate planning and partial NUA strategies

💡 Did You Know?

📈NUA = appreciation of employer stock in 401(k)/ESOPSource: IRC 402(e)(4)
💰Cost basis taxed as ordinary income; NUA taxed at LTCG when soldSource: IRS
📦Must take lump-sum distribution—stock in-kind, not rolloverSource: IRS
⚖️Savings = Rollover tax (all ordinary) minus NUA tax (basis ordinary + NUA LTCG)Source: IRS
🏢Triggering events: separation, death, disability, 59½Source: IRS
📊Higher ordinary bracket + lower LTCG = bigger NUA benefitSource: CFP Board

📖 How NUA Tax Works

NUA strategy: take employer stock as in-kind distribution. Cost basis is taxed as ordinary income at distribution. NUA (appreciation) is taxed at LTCG when you sell the stock. Rollover strategy: all taxed as ordinary income when withdrawn.

NUA Tax

Tax = (Cost Basis × Ordinary Rate) + (NUA × LTCG Rate)

Rollover Tax

Tax = Stock Value × Ordinary Rate

🎯 Expert Tips

💡 High NUA Ratio

Best when NUA is large vs cost basis. More appreciation = more LTCG savings.

💡 Lump-Sum Required

Must take full lump-sum distribution. Partial rollover can disqualify NUA.

💡 Timing

Consider selling when in lower bracket. NUA taxed at sale, not distribution.

💡 Estate Planning

Heirs get stepped-up basis on unsold NUA stock in some cases. Plan accordingly.

⚖️ NUA vs Rollover

FactorNUARollover
Cost basisOrdinary incomeOrdinary income
NUA/AppreciationLTCG when soldOrdinary income
DistributionLump-sum in-kindRollover to IRA

❓ Frequently Asked Questions

What is NUA?

Net Unrealized Appreciation—the gain on employer stock held in a qualified plan.

When is NUA taxed?

Cost basis at distribution (ordinary income). NUA when you sell the stock (LTCG).

What triggers NUA eligibility?

Lump-sum distribution due to separation, death, disability, or 59½.

Can I roll over part and take NUA on part?

Complex. Generally must take lump-sum. Consult a tax professional.

Does NUA work for IRA?

No. NUA applies to employer stock in 401(k), ESOP, etc. Not IRA.

What if I sell immediately?

NUA still taxed at LTCG. No holding period for NUA treatment.

📊 NUA by the Numbers

LTCG
NUA Tax Rate
Ordinary
Basis Tax
Lump-Sum
Required
401(k)
Eligible Plans

📚 Official Data Sources

⚠️ Disclaimer: This calculator provides estimates. NUA rules are complex. Consult a tax professional.

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