Dear Sir/Madam,

I have a young client (late 30s) who has a relatively small amount ($15K) of company stock in his 401K with a previous employer.

What information other than his cost basis should I gather in order to advise him? Through reading this forum, I understand that if his cost basis is less than 30% of the value of his stock, NUA could be advisable.

The cients we’ve used this with in the past have needed the cash proceeds quickly for living expenses, so it was clear to me how NUA was preferable to rolling the funds into an IRA because they could access the NUA right away at LT cap gains rates instead of ordinary income rates.

This case is less clear to me because he is a high income earner, he would pay a 10% penalty on the cost basis and the fact that he doesn’t need the cash proceeds anytime soon.

Thanks in advance for your advice,

Chris