Planning Briefs
Tune Into The Tax Break For NUA
Published Wednesday, October 5, 2016 at: 7:00 AM EDT
NUA isn't the latest channel available on your cable TV system. It stands for "net unrealized appreciation"—a little-known gem of a tax break for those who take payouts in the form of company stock from a 401(k) or other employer-sponsored retirement plan.
This tax law provision lets you benefit twice: once when you pay the tax on the plan distribution and once when you sell the stock.
If you receive a retirement plan distribution in company stock, you'll be taxed only on what you initially paid for it. You won't have to pay tax on any subsequent gains in value—known as net unrealized appreciation, or NUA. In contrast, cash distributions from your 401(k) normally are taxed as income, at rates up to 39.6%.
© 2024 Advisor Products Inc. All Rights Reserved.
More articles
- Tax Rewards For Year-End Generosity
- Easier Rules On IRA Rollover Waivers
- What Would You Do For A Bigger Salary Or More Benefits?
- Seek The Comfort Of A Pet Trust
- Locate A Tax Shelter Near A School
- 4 Year-End Strategies For Investors
- 5 Key Documents In An Estate Plan
- What's The Truth About Probate?
- Remember The Lesson Of Rebalancing
- Tie The Knot For Retirement With A Spousal IRA
- Higher-Paying Job May End Up Costing You
- 4 Cornerstones Of Diversification
- With Or Without The New Fiduciary Rule, We Have Your Back
- Social Security Options Remain
- Do Robo Advisors Have Glitches?