NUA Distribution While Still Working?
Scenario:
• Client is 62 and still actively working and plans to continue working until the end of 2024.
• When client turned 59.5 we did a partial in-service distribution
• Client has XYZ stock with a basis of $5K and current value of $60K.
What I want to confirm is.. Did we already use the 59.5 triggering event with the first distribution or can we do an NUA now and as long as there is no balance in the account at the end of the year we can still get NUA treatment of the shares? The client will turn off contributions end of November and 1 final distribution end of December.
Any insight would be helpful.
Thanks!
Permalink Submitted by Alan - IRA critic on Mon, 2023-01-23 20:16
Yes, the age 59.5 triggerring event was extinguised by the intervening distribution that followed. Therefore, client will have to wait for a new triggering event, being separation from service. Client could take a distribution now, but it would not qualify for use of NUA. Looks like the next chance for a qualified LSD will be early in 2025.