tracking NUA stocks for stepped up basis in brokerage account
I understand that NUA portion of the brokerage account does not get stepped up basis on the death of the account owner. Are the NUA stocks tracked differently by the major brokerage houses (Ameritrade, Fidelity, etc) to assure that they get different treatment for stepped up basis on the owner death? If they do track it differently — what should i look for in the statement etc? Especially if NUA stocks and other stocks are in the same account. — and thus it would be difficult to separate them from each other on the owner death.
Permalink Submitted by Alan - IRA critic on Wed, 2019-08-28 01:43
I don’t know how much support you might expect from the average broker. You would have to check with your own broker, and I imagine their answer could be a factor to determine which broker you might use to hold these shares. Because of diversification, I think most people holding NUA shares should not maintain any additonal employer shares, nor should they reinvest dividends to create additional non NUA shares and reporting complexity. Perhaps given all the needed data, a given broker could fully support NUA, and there could be others that provide no support and treat these shares like non NUA shares and leave it up to the client to override the 1099 B when filing taxes and completing Form 8949. A broker with full support would have to reduce the amount of NUA per share if the shares declined after distribution from the plan, and they would have to track additional gains as being ST for the first year, and LT after that. I suspect that major brokerages are much more likely to provide a greater degree of support than smaller ones, but I would certainly feel better if I could look at my account and see the amount of NUA and any non NUA gain on any day. After one year from the distribution date, all gains are LT but the NUA of course does not get the basis adjustment at death.