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

Categories: 401(k), Removing money from a qualified plan

Having employer-issued stock in a 401(k) plan opens the door for a conversation on doing an NUA distribution. But to qualify for the NUA distribution, your client must satisfy several very important rules, some of which or often misunderstood.

To help make the conversation 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 the basis and gains

 

Updated for 2019