60 day rollover rules

I had 100% of employer stock in a 401k plan. Since the shares were not publicly traded, they gave me one option cash out and roll all to an IRA or cash out and do NUA on the shares. The cash is now is a non qualified bank account. Can I halve the value of the shares into an IRA within 60 days. I am being told that I have to roll the same property that was distributed. Since I don’t have the shares just the cash, that I am stuck with full NUA on all the shares.



What you were told is partially incorrect.  While you can roll over the proceeds from the sales of the shares that you do not claim NUA on, you cannot utilize NUA and then rollover the proceeds from selling those same NUA shares. You could decide to report NUA on half the shares and roll over the proceeds from the sale on the other half.  Your tax reporting would then differ from the 1099R that will report cost basis and NUA on 100% of the shares and you would have to include an explanatory statement with your return. You should know what your % of cost basis is in order to know if NUA is viable. Usually, the cost basis should be under 25% unless you need the proceeds to pay current or late bills.  Note that having to roll over the same property that was distributed applies to distributions from IRA accounts, not from qualified plans.



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