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Working / Accumulation Phase, Tax Planning, Assets and Investment Planning

Can I Do A Net Unrealized Appreciation (NUA) Distribution?

Updated 12/1/2023

Clients that own employer-issued stock in a 401(k) plan may benefit from favorable tax treatment under the NUA rules. But, to qualify for an NUA distribution, your client must satisfy several very important rules, some of which are often misunderstood.

To help make this analysis easier, we have created the “Can I Do A Net Unrealized Appreciation (NUA) Distribution?” flowchart. It addresses some of the most common issues that arise for a client thinking about doing an NUA distribution. This flowchart considers:

  • What type of stock qualifies
  • Triggering events that must be satisfied
  • Timing considerations
  • Tax impact of cost-basis and gains
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