company issued stock as part of profit sharing
Client has preferred stock as part of her profit sharing plan (Proctor & Gamble) .
I am trying to find out if she can take advantage of Net Unrealized Appreciation.
I have heard that when she completely separates from service, retires, and she pulls all her money from P&G that her company stock in her profit sharing plan will only be taxed at the original coat basis.
Can you please shed some light on this?
Thanks,
jeff
Permalink Submitted by Alan - IRA critic on Wed, 2018-11-14 15:27
If she does a proper lump sum distribution and the shares are transferred to a taxable brokerage account, she should be eligible for NUA. That seems to be what she is hearing. Whether her cost basis is low enough to make NUA beneficial is another question.
Permalink Submitted by Jeff heybrock on Thu, 2018-11-15 16:10
She will be moving her entire profit sharing account to a TD account. I guess she has 2 choices, move it to an IRA and pay a little bit of tax now, or move it to a taxable account and take advantage of NUA (with a full tax hit on the cash in her profit sharing) on the company issued stock.