NUA from an ESOP?
How do I know if an ESOP is eligible for an NUA transaction? It is all pre-tax with a $30K basis and current market value of $160K. The representatives for the custodian doesn’t understand NUA, so they weren’t able to answer any questions.
Permalink Submitted by Alan - IRA critic on Thu, 2021-02-04 15:13
Normally, ESOP shares are eligible, but they have to be actually distributed to you. In addition, for a qualified LSD all other similar plans must be distributed in the same year. Since the 1099R must be completed showing NUA in order for you to apply it, the plan sponsor should be able to check with the firm that preparers the 1099R forms, since other employees have probably utilized NUA if they knew about it. If you have other employer shares in the 401k, they would have a different cost basis and you can choose to distribute only the shares you wish, normally the lower cost basis shares, and roll over the rest of them and sell them for diversification purposes.