NUA
I understand that NUA is not subject to Net Investment Income Tax, but when the cost basis of the NUA shares are distributed and taxed as ordinary income, it that ordinary income subject to NIIT ?
I understand that NUA is not subject to Net Investment Income Tax, but when the cost basis of the NUA shares are distributed and taxed as ordinary income, it that ordinary income subject to NIIT ?
Permalink Submitted by Alan - IRA critic on Tue, 2024-10-22 11:39
No, the cost basis is not treated as investment income for the NIIT, however the additional taxable income might push other investment income over the threshold for the NIIT.
When the shares are sold, the amount of NUA per share is also not treated as investment income for NIIT purposes, but any additional gains after the distribution from the plan are.