Question about NUA from client’s current 401k
I have a client, age 55, that works for a pubilc company which was spun off of the mother company. Both companies trade on the NYSE. The client currently has ~$250,000 in the mother company stock in his 401(k). He received notice that the mother company stock would be automatically liquidated at year end if he did not sell prior to that time.
The company does not allow for in-service withdrawals until age 59.5.
Question:
Can the client use the NUA concept?
Thanks for any help.
Bob
Permalink Submitted by Alan Spross on Thu, 2008-12-04 23:30
It the shares are sold in the plan, the NUA potential goes up in smoke. Why are the shares being liquidated, for reasons due to the status of the mother company (such as being taken private), or due to decisions of the plan administrator? If the latter, plan beneficiaries may have reason to file a complaint to attempt to prevent the liquidation.
If the former, the client is out of luck since I presume there is no time for him to separate from service and get an LSD done by year end.