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.
Why This Matters for Your Finances
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 basis
- ●Lump-sum required
- ●LTCG on NUA when sold
NUA Calculator
Employer stock • LTCG vs ordinary • Tax savings
Sample Scenarios — Click to Load
Stock & Tax Details
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
Tax Rates
NUA Strategy
Comparison
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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
NUA taxed at capital gains
Basis taxed at distribution
Required for NUA
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?
📖 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 Rollover strategy: all taxed as ordinary income when withdrawn.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
| Factor | NUA | Rollover |
|---|---|---|
| Cost basis | Ordinary income | Ordinary income |
| NUA/Appreciation | LTCG when sold | Ordinary income |
| Distribution | Lump-sum in-kind | Rollover 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
📚 Official Data Sources
- • IRS Pub 575 – Pension and annuity income
- • IRS.gov – NUA rules
- • CFP Board – NUA strategies
⚠️ Disclaimer: This calculator provides estimates. NUA rules are complex. Consult a tax professional.