Hello,

I have a client whose husband passed away in 2017. The decent held company stock in Employee Savings Plan (ESP) account, which is a qualified plan as described in Section 401(a). During 2017, the surviving spouse transferred the decedent’s account to an ESP account in her name within the same company.

My questions are:
1) Does the surviving spouse qualify for Net Unrealized Appreciate treatment if she makes a lump sum distribution to a taxable brokerage account during 2018?
2) Or did the mere transfer in 2017 from one company ESP account under the decent’s name to another company ESP account under the surviving spouse’s name necessitate the NUA treatment be utilized by the December 31, 2017?

I appreciate any insight you can provide.