Net Unrealized Appreciation
I have read thru several posts on this topic, but I am confused about something:
Everything I’ve read on the web says that after the NUA distribution, the stock can be sold immediately and the gains will be taxed as long term capital gains. I read some older threads on this site saying the stock needs to be held for a year after the distribution to qualify as LT. Can someone please confirm what is correct?
Thanks for the help!
Permalink Submitted by Alan Spross on Mon, 2012-10-15 23:51
The NUA included in the cost per share at the time of distribution is subject to the LT cap gain if sold anytime after the distribution. Gains IN ADDITION TO to the amount of NUA at the time of distribution are subject to the ST cap gain rate if sold in the first year after distributions and LT after the first year. So they are both right depending on which part of the gain is being addressed.
The gain in addition to the NUA amount is not NUA and subject to the usual LT cap gain holding rules.