Rollover your 401(k) and distribute your company’s appreciated stock via “Net Unrealized Appreciation” (NUA). This cuts your taxes in half from high ordinary rates (39.6% +) to low capital gains rates (0%, 15%, 20%). It also avoids the Net Investment Income Tax Rate (3.8%). I’ve heard enough, I want to schedule a call…
We’re in a Bull-Market right now, and stocks are likely moving even higher. This presents an excellent tax-planning opportunity for the company stock in your 401k. If you are a retiree, listen up. An important question to ask is how do I get the most out of my retirement account? Oftentimes the simplest factor is income tax. Unfortunately, clients often review income taxes after the end of the tax year. However, by then, its often too late. Nevertheless, income taxes are the most critical factor (aside from diversification) to keep in mind when making retirement decisions. Furthermore, the very decision to save in a retirement account is a tax arbitrage. You are choosing to defer income taxes for a later date, as well as avoiding capital gains taxes. So, it’s important to maximize every dollar of savings. Contact…
The NUA – Net Unrealized Apreciation.
A frequently overlooked and misunderstood retirement tax saving strategy is the use of a lump-sum distribution involving a distribution of employer-stock with Net Unrealized Appreciation (NUA). NUA is not widely known or understood because the IRS has published very little about it outside of its Treasury Regulations. Contact…
It works for employees who hold appreciated company stock in their 401k’s. To qualify, the employee needs to take a lump-sum distribution. Additionally, take the lump-sum distribution within 1-year from the date in which you have a “triggering event.” A triggering event is the date of retirement, disability, or separation. The trustee of your retirement account will distribute the NUA company stock into a separate taxable account. Federal income tax and early withdrawal penalties owed on the stock’s adjusted basis. The tax on the NUA is deferred and the employee can elect to include the NUA in income. Contact…
In conclusion, be aware: the NUA is not for everyone. Importantly, there are many pitfalls and traps for the unwary, such as improperly making the distribution. Thus, it is important to contact a tax specialist to guide you through the process. An analysis should be conducted to determine the tax ramifications, and the potential savings, for each unique situation. Contact…
With a little bit of planning, you could have a lot more money to spend in your retirement. Finally, we are available nationwide to handle your matter. Meet Charles.