Avoid NUA distribution
Client has a 401k that has yet to be touched. Part of the 401k is a large amount of stock with a lower cost basis. We would like to distribute and use NUA on the stock. However, she needs to complete a distribution this year. If she takes the distribution this year, will it disallow the rollover and NUA she would like to do in 2015?
Permalink Submitted by Alan - IRA critic on Mon, 2014-12-22 17:50
A distribution this year wouldl be an intervening distribution and disqualify a later LSD for NUA purposes unless the client has a new triggering event after the distribution and prior to the LSD. Triggering events are separation and reaching 59.5.