In 2019, my client did an NUA distribution of 2,000 shares of his employer stock. The client is now getting ready to sell some of the NUA shares distributed in 2019.

The NUA distribution was properly reported on a 2019 form 1099-R, which contains the following information: Box 1 “Gross distribution” of $200,000; Box 2a “Taxable amount” of $ 25,000, Box 5 “Employee contrib/desig Roth contrib or insurance premiums” of $20,000, and Box 6 “Net unrealized appreciation in employer’s securities” of $155,000.

Am I correct in understanding that the cost basis of the NUA shares is $45,000 ($25,000 + $20,000) or $22.50 per share ($45,000 / 2000 shares)?

Thanks.