Stepped Up NUA Basis for Beneficiary
If an individual converts their NUA and holds the shares until they pass away, does the beneficiary receive a stepped up basis when they inherit the shares or does the original conversion basis apply. Thanks.
If an individual converts their NUA and holds the shares until they pass away, does the beneficiary receive a stepped up basis when they inherit the shares or does the original conversion basis apply. Thanks.
Permalink Submitted by mk foss on Wed, 2009-06-10 16:25
NUA is an IRD item so the basis step up is limited. For example, if the plan cost was $28 per share and the FMV $70 (NUA of $42) and the value at the date of death was $75 per share. The per share step up over the plan cost would be the $5 difference.