ESOP To Roth
In an ESOP there is NUA. Previously it made sense to not roll over to a Traditional IRA because of the NUA and the different tax treatment. What about a Rollover from the ESOP to a ROTH. Any problems with this?
In an ESOP there is NUA. Previously it made sense to not roll over to a Traditional IRA because of the NUA and the different tax treatment. What about a Rollover from the ESOP to a ROTH. Any problems with this?
Permalink Submitted by mk foss on Thu, 2011-10-06 17:06
The IRS issued a notice in 2009 (Notice 2009-75) that indicates you lose the NUA benefit by converting to a Roth. That means the conversion is taxed at FMV not the plan cost of the ESOP shares.