ESOP
What are the options for an ESOP once retired? Thanks.
Can the stock be sold and reinvested and still keep its pre-tax status? OR do I need to have the stock sold first within the plan and then move cash to an IRA? Thanks.
What are the options for an ESOP once retired? Thanks.
Can the stock be sold and reinvested and still keep its pre-tax status? OR do I need to have the stock sold first within the plan and then move cash to an IRA? Thanks.
Permalink Submitted by Alan - IRA critic on Thu, 2017-09-21 22:57
It is a qualified retirement plan, so it can be rolled over to an IRA. The shares can also be distributed to a taxable brokerage account if the appreciation is high enough to use NUA. With NUA you owe ordinary taxes on the cost basis (what the company paid for the shares when added to your ESOP account) when the shares are distributed and whenever those shares are sold you pay the lower LT cap gain rate on the appreciation. Generally, NUA is only viable if the cost basis is less than 30% of the current share value.