Phased ESOP distributions and NUA
A former employer of mine informed me I have a ESOP distribution available. I have about 600k in the ESOP, but they are distributing 350k now and the rest will be phased over the next few years. Does that eliminate the opportunity take a distribution directly and use NUA to pay capital gains on the appreciation? Or can I still do it and I just have to do the same for each distribution?
Thanks!
Permalink Submitted by Alan - IRA critic on Tue, 2014-11-11 18:28
Only the last distribution could qualify as a lump sum distribution, and even that distribution will not qualify unless a new triggering event erases the prior intervening distributions that are being taken. For example, if you reach 59.5 you have a new triggering event and that would erase prior intervening distributions. But that would only work if the ESOP has only one distribution remaining. Looks like too many timing issues to overcome.