NUA Transaction

Client has a 401(k) invested exclusively in a company stock fund that exclusively owns company stock. Statement reads you investment in company stock fund represent approximately 500 shares of company stock at $25 per share…

Will this still qualify for an NUA transaction or does it have to be actual company stock that is held??

Thanks



It should qualify.
These are usually “unitized”, with ownership in #s of units with dividends reinvested in the purchase of additional units. But the IRS has ruled that a distribution of actual stock shares after the units have been redeemed by actual shares does qualify for NUA treatment, and the small amounts of cash held in the accounts to provide liquidity does not impair this. The usual LSD rules would apply.



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