Cost basis on NUA stock of beneficiary
The following account had an average cost basis per share of $60.At NUA time the stock price was $300. At time of death the share price in the taxable brokerage account was $500. Is there any step up basis for the beneficiary? If so are there any discussion s on removing stepped up basis for NUA accounts?
Permalink Submitted by Alan - IRA critic on Tue, 2021-05-04 00:08
Gains after distribution are not NUA. There is no basis adjustment for the NUA of 240 per share, but there is for additional gains, in this case 200 per share. The 200 would be treated like any other LTCG. There have been past proposals to eliminate NUA, but none of them made it into actual legislative proposals.
Permalink Submitted by Gil Shifrin on Tue, 2021-05-04 00:32
So if the beneficiary sold a share on day after death the cost basis would be $260 ? Also the recent discussion on removing step up basis on capital gam for beneficiary is not about NUA accounts? Thanks.
Permalink Submitted by Alan - IRA critic on Tue, 2021-05-04 01:13
Yes, the cost basis would be 260, resulting in a LT cap gain on the 240 of NUA. I doubt if the recent proposals for eliminating the basis adjustment contemplate NUA, which does not get a basis adjustment in the first place. The past proposals that I was referring to were made by the Obama administration to eliminate NUA as an option altogether, but it was not included in any legislation. Don’t know if that would also come up again, but if it did it reasonably could only apply to LSDs not yet made.