NUA

Submitted by Patrick A. Van Burkleo on Wed, 2007-10-24 20:14

I have a client that has company stock in 401K. Client is 63 years of age and has been taking dividends the last 3-4 years from the account which are reported on 1099-Div. My question is does this disqualify him from NUA treatment since the regulatins say monies must all come out in 1 calendar year?

Thanks,
Andy



Submitted by Alan Spross on Thu, 2007-10-25 01:22

It won’t if these are ESOP dividends under Sec 404k, as they are not considered part of the “balance to the credit of the employee”. A clue to whether these are ESOP dividends can be taken from the 1099DIV since an ESOP dividend would NOT be qualified for the lower tax rate.

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