Net Unrealized Appreciation in 401k vs. taxable
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Net Unrealized Appreciation in 401k vs. taxable
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.
- anon_investor
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Re: Net Unrealized Appreciation in 401k vs. taxable
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).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.
https://www.bogleheads.org/wiki/Net_unr ... preciation
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Re: Net Unrealized Appreciation in 401k vs. taxable
Or just stay away from single stocks.
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Re: Net Unrealized Appreciation in 401k vs. taxable
Makes sense. Thanks very much.