Possible Sale of NUA Stock
Alan and Chuck: Thanks very much to both of you for the prompt, pithy and patient input re my inquiry. In my case, the actual per share price details at LSD date in year 2000 were: FMV 76.02; acquisition cost/tax basis 17.07; NUA 58.95. The share price these days is quite active in 60-80 range. So apparently NUA is still fluid (vice “frozen”). BUT I’m not clear whether/how much my original per-share basis and NUA were affected by a 2-for-1 stock split in June 2001, a year after the LSD! Perhaps that split halved the per share FMV/Basis/NUA?
In any case, I’m studying your comments and trying to put together a coherent writeup that should at least red-flag this matter for heirs. Thanks again for your thoughts.
Permalink Submitted by Alan Spross on Tue, 2008-12-09 21:12
You guessed correctly. A 2 for 1 stock split will reduce your cost basis to 8.535 per share, and your NUA to 29.475 per share maximum. As mentioned previously, that NUA figure is a cap and is reduced if the stock price drops, but is restored if the stock rises back again to a split adjusted 38.01. Any further increase becomes a typical LT gain, taxed at the same rate as the NUA, but that portion gets a basis adjustment at your death, as opposed to any inherited NUA.