medium · Certified Financial Planner Retirement
A client holds employer stock in a 401(k) with a cost basis of $150,000 and a Fair Market Value of $200,000.
Why might a planner recommend against a Net Unrealized Appreciation (NUA) election in this specific case?
- The employer stock must be held for at least 10 years inside the plan.
- The long-term capital gain rate is always higher than the ordinary income rate.
- The cost basis ratio is too high (75%), wiping out the benefit of the strategy.
- NUA elections are only permitted for participants over age 73.
Sign up free to see the explanation and track your rank →
More Certified Financial Planner Retirement practice
- Why are zero-coupon bonds considered the perfect instrument for precise liability immuniza
- Under Section 2035, what is brought back into the donor's gross estate?
- According to the decision hierarchy, which rank resolves the conflict?
- What is the total federal tax rate applied to their capital gains, including the Net Inves
- How many total life insurance policies are required to execute this agreement?
- What is the maximum combined contribution they can make without consuming any of their $15
- The Solis household invested in a small business that failed… — How much of this loss can
- Which statement is true?