My 401k account holds Company Stock from both pretax and after tax contributions. I am considering an NUA on all shares of Company Stock and understand the following distributions would occur:
1. Pre-tax contributions and earnings for Company Stock go into a Taxable brokerage account, at which time ordinary income tax will be due on the cost basis, and capital gains tax would be paid when I sell those shares;
2. Pre-tax contributions and earnings on non-Company Stock roll into a Trad IRA (TIRA);
3. After tax non Company contributions roll into a RRA;
4. After tax non Company earnings roll into a TIRA;
But unclear on how the following gets distributed:
5. After- tax contributions for Company Stock
6. After tax earnings for Company Stock
I've read that one can choose which shares of Co Stock to use NUA, though understand Fidelity doesn't allow this and takes an average of cost basis of Company stock. Doesn't seem right.
Thanks in advance.