NUA Eligibility Brokerage Link
I own Company Stock in a Previous employer’s Company Sponsored 401k Stock Fund. This was all obtained as a result of an ESOP plan when I was employed there.
A few years ago, They spun off some assets into a separate company. At the same time, they created this thing called “Brokerage Link” and the stock of the second company resides in the Brokerage link Account. I have never bought or sold any of the Company Stock; Either the original or the spin-off. Both Stocks are publically traded.
My advisor is telling me that the stock in the Brokerage Link account can not be considered for purposes of using the NUA option. He did not explain why. I have not pressed it as it is a couple of years down the road.
Do you know of any reason the spin off stock would not be eligible for NUA ? Everything still resides in the original company’s 401K. Have I supplied all the information needed to make a judgment ?
Thanks
Dennis
Permalink Submitted by Alan - IRA critic on Thu, 2016-12-22 22:20
Possibly he thinks that the brokerage link is the same as a taxable brokerage account. However, it could instead be an account within the 401k plan as you indicated. If so, he would be incorrect, and NUA would still apply with a qualified LSD. Suggest you call the plan administrator to confirm and also to get a cost basis quote to determine if NUA is viable. If you are not yet 59.5 or if you separated prior to the year you reached 55, the 10% penalty would apply to the taxable cost basis amount shown in Box 2a of the 1099R.
Permalink Submitted by Jimmy Rench on Thu, 2016-12-29 21:53
Everything that I have seen regarding BrokerageLink accounts are that they are self-directed IRAs located inside company 401(k) plans. Don’t understand how they get around ERISA requirements, but that is how Fido labels them.