How to report NUA stock Cost basis on Form 1040
I took a limp sum distribution from my pension fund in June 2016 and opted for NUA treatment on a big chunk of the company stock. I have a big amount for the Cost Basis for the stock. Can I report this on my 2016 tax return in installment? If not, where do i report the cost basis on the form 1040? Are there any deductions I can try for?
Permalink Submitted by Alan - IRA critic on Fri, 2016-08-05 17:49
You will have to report the full1099R Box 2a amount on lines 15a and 15b of Form 1040. There are no deductions other than the ordinary itemized deductions you might have to offset this income. Usually, NUA is not worthwhile unless you need to cash in the shares to pay living costs. Otherwise, your cost basis should generally be less than 30% of the share value. You could still change your mind within 60 days of receipt and roll the shares over to an IRA and that would eliminate all current taxes. Otherwise, keep track of your cost basis for the shares on a per share basis. NOTE: You cannot sell the shares and claim LT cap gain treatment and then roll over the proceeds.