NUA with after tax portion: what is the capital gain?

Submitted by peter mcloone on Sat, 2017-11-04 15:37

Received stock in kind as 401k distribution (while rolling over remainder of 401k to a TIRA).
Value of stock: 80000
Cost basis: 30000
After tax contribution: 10000
So the net federal tax amount of the distribution is 20000
I intend to sell the stock this year.
Is the capital gain 80000-30000 = 50000 or 80000-20000 = 60000?

Thanks



Submitted by Alan - IRA critic on Sat, 2017-11-04 17:07

LT cap gain would be 50000. You would report a basis of 30000 on Form 8949. Additional gains in the first year in the brokerage account would be ST gains, a loss would reduce the NUA per share accordingly. This assumes the plan application of the after tax contributions does not deviate from the typical treatment of reducing the taxable cost basis of the shares.

Submitted by peter mcloone on Sat, 2017-11-04 22:50

thanks

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