easy · Certified Financial Planner Investment Planning
The Solis household is evaluating a Net Unrealized Appreciation (NUA) strategy for employer stock within their 401(k). The stock has a current fair market value of $200,000 and a cost basis of $165,000.
Why might a fiduciary recommend against the NUA election in this specific case?
- The NUA strategy is not available for 401(k) plans
- Capital gains on NUA are always taxed at ordinary income rates
- Lump sum distributions are no longer allowed under SECURE 2.0
- The cost basis is too high relative to the fair market value
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