NUA
In order to use the NUA is it necessary to make a full Lump Sum Distribution from my company retirement account? Can I just request the company securities ?
I would like to keep part of my retirement account dollars where they are as they offer good choices.
Permalink Submitted by Alan Spross on Thu, 2010-08-26 15:59
Sorry, but you must take a full LSD. All the assets of the plan and similar plans must be distributed no later than the end of the year in which the NUA stocks are distributed. A DB plan is not considered a “similar plan” to a DC plan.
That said, there is a little used version of NUA allowed when there is no qualified LSD, but it is not worth much. It is limited to the NUA attributable ONLY to employee contributions.
If you get a quote on the amount of NUA per share and decide to act on it, don’t wait until too late in the year. If all assets are not distributed by 12/31, there is no LSD, and worse yet if 60 days has passed since the stocks were distributed you cannot roll them over, and the entire value would be taxable. If you were then stuck in that position, the watered down version of NUA could still help somewhat.