NUA (privately held stock)
Does the NUA tax benefit apply to privately held stock? If so due the rules parallel publicly traded stock NUA treatment?
Thank you
Does the NUA tax benefit apply to privately held stock? If so due the rules parallel publicly traded stock NUA treatment?
Thank you
Permalink Submitted by Alan - IRA critic on Fri, 2015-05-01 16:30
Yes, same rules apply.
Permalink Submitted by [email protected] on Fri, 2015-05-01 18:05
Some privately held company plans don’t allow thte stock to be held outside of the plan, so this could be challenging. I’ve seen where some like this will allow the NUA distribution but require an immediate sale of the stock back to the company. – m
Permalink Submitted by Alan - IRA critic on Fri, 2015-05-01 19:08
Good point. With a forced sale back to the plan or to the company the employee loses the option to realize the cap gain when he wishes. Both the taxable cost basis and the LT gain will be taxable in the year of the LSD, triggering a higher and earlier tax bill. Therefore, NUA in this situation is less beneficial in general, but still beneficial for those who need the funds for other purposes right away.