NUA
Suppose Client separates from service at age 50 with employer stock in his qualified plan account. If client wishes to take advantage of NUA strategy and moves employer stock to a taxable account, will he owe not just income tax on the basis of the stock, but also a 10% penalty because he is under age 59-1/2?
Permalink Submitted by mk foss on Mon, 2013-03-04 17:56
You need to only be 55 to avoid the 10% penalty from a qualified plan, provided you retire after 55. With a retirement at age 50,there will be a 10% penalty on NUA stock. The 10% applies to the taxable basis only.