401k and NUA

Submitted by D H on Tue, 2017-05-23 04:20

Scenario: Death of 401k participant who was born before 1936. Based only on figures from 401k statement (rounded) below, would exercising the NUA vs. entire rollover to IRA be recommended?

Contributon Credits:
Total Non-taxable Credit: 13K
Stock Fund Cost Basis: 700K

Closing statement balance:
After-tax total: 2.1M
Before-tax: <$100
Company Match: 900K

Thank you



Submitted by Alan - IRA critic on Tue, 2017-05-23 04:35

If only 13k of after tax contributions were made to the plan, how could the after tax total be 2.1mm? The company match of 900k is pre tax.  When considering NUA, if the cost basis of employer shares for NUA purposes is 700k, what is the current value of the highly appreciated employer shares?  I don’t think the 401k statement has been interpreted correctly.

Submitted by D H on Tue, 2017-05-23 17:33

Thank for the reply, Alan. I just transposed the figures (rounded) as the are on the statement. I will contact the adminstrator to understand it better and will report back.

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