Are ESOP shares would be covered or uncovered when used for NUA purpose.

Submitted by abraham boznick on Wed, 2023-12-27 17:06

When ESOP shares transferred to brokerage house for NUA purpose — are they transferred as covered or uncovered shares?



Submitted by David Mertz on Wed, 2023-12-27 19:44

Noncovered shares.



Submitted by abraham boznick on Sat, 2023-12-30 19:43

can you provide a link to some sort of federal regulation indicating that ESOP shares are considered non covered by the brokerage house after NUA transfer



Submitted by David Mertz on Sat, 2023-12-30 20:13

  • Section 6045(g)(3)(A) defines a covered security: “In general: The term “covered security” means any specified security acquired on or after the applicable date if such security- (i)was acquired through a transaction in the account in which such security is held, or (ii)was transferred to such account from an account in which such security was a covered security, but only if the broker received a statement under section 6045A with respect to the transfer.”
  • Because the securities were not acquired by a transaction within the brokerage account and were not transferred to the brokerage account from an account where they were covered securities, these securities are not covered securities in the brokerage account.


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