Net Unrealized Appreciation in 401k vs. taxable

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anakinskywalker
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Joined: Sun Aug 24, 2008 8:20 pm

Net Unrealized Appreciation in 401k vs. taxable

Post by anakinskywalker »

Are there any circumstances where it may be preferable to hold employer securities in 401k and use Net Unrealized Appreciation (NUA), as opposed to selling it in 401k and holding an equivalent amount of employer stock in a taxable account instead? Thanks very much.
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anon_investor
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Re: Net Unrealized Appreciation in 401k vs. taxable

Post by anon_investor »

anakinskywalker wrote: Sun Jan 23, 2022 10:54 pm Are there any circumstances where it may be preferable to hold employer securities in 401k and use Net Unrealized Appreciation (NUA), as opposed to selling it in 401k and holding an equivalent amount of employer stock in a taxable account instead? Thanks very much.
Very low cost basis NUA eligible shares in the 401k. You would be able to only pay ordinary income tax on the cost basis and long term cap gains rates on the rest of value (you have to do a few thing to be eligible for this tax treatment).
https://www.bogleheads.org/wiki/Net_unr ... preciation
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Re: Net Unrealized Appreciation in 401k vs. taxable

Post by placeholder »

Or just stay away from single stocks.
Topic Author
anakinskywalker
Posts: 487
Joined: Sun Aug 24, 2008 8:20 pm

Re: Net Unrealized Appreciation in 401k vs. taxable

Post by anakinskywalker »

Makes sense. Thanks very much.
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