NUA Question
I have a client and his father as recently passed away. His father left his IRA to his wife which had some company stock, Allstate in this case. Some was bought while he was working and some was bought after he retired. I know that the stock that he recently bought ($27 and is now $42) has appreciated. I wasn’t sure if we should utilize an NUA strategy because of the appreciated company stock or even if we could be cause the original purchaser is deceased.
I am somewhat familiar with the NUA strategy but would love some clarification. Can explain if the NUA strategy would work in this circumstance if so how and if not why. Again some of the company stock was bought after he retired, I wasn’t sure if that made a difference.
Permalink Submitted by Alan - IRA critic on Tue, 2013-01-08 21:46
NUA only applies to lump sum distributions from qualified employer plans of employer securities. Once shares are rolled into an IRA, NUA can no longer be used for those shares or any other shares purchased in the IRA. There might have been NUA potential before the shares were rolled over to an IRA if the shares had been distributed to a taxable brokerage account instead.
Permalink Submitted by Eric Woodfill on Wed, 2013-01-09 00:34
Yes, of course your right. I apologize for the dumb question. It looks like I got a little ahead of myself.