NUA for Preferred Stock too???
I haven’t been able to find anything that says you can get NUA treatment on preferred stock rolled out of a 401(k) like you can on common stock. I’ve got a situation where someone has both common and preferred and the preferred has a substantially lower basis.
Permalink Submitted by Alan Spross on Mon, 2008-10-27 03:10
The definition of securities pasted below in Sec 402(e)(4) includes preferred stock. While the cost basis may be lower, usually these shares do not appreciate as much as common stock (or lose as much either). Therefore, they should be eligible for NUA in a qualifying LSD.
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(E) Definitions relating to securities
For purposes of this paragraph –
(i) Securities
The term “securities” means only shares of stock and bonds or debentures issued by a corporation with interest coupons or in registered form.
(ii) Securities of the employer
The term “securities of the employer corporation” includes securities of a parent or subsidiary corporation (as defined in subsections (e) and (f) of section 424) of the employer corporation. [(5) Repealed. Pub. L. 104-188, title I, Sec. 1401(b)(13), Aug. 20, 1996, 110 Stat. 1789]
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