NUA Cash portion | Ed Slott and Company, LLC

NUA Cash portion

I had 6644.408 unitized shares of Humana stocks in my 401k account with an additional 2% of the shares in cash. Schwab converted to 2322 shares when I executed the NUA. What should happen to the 2% of cash 13586.16?

Unitized stock funds usually hold some cash. Most likely the cash balance should be part of your direct rollover to an IRA of the rest of the plan balance to complete the LSD if that cash was never utilized to purchase company shares. Contact Schwab for clarification and have them verify that your NUA 1099R Box 1 will not show any of the cash, just the FMV of the 2322 shares.  If you do not mind, please post back how Schwab plans to report this.  Once you have calculated the cost basis of these shares, advise your broker so they can record that cost basis and flag the shares as NUA shares so your 1099B will be correct when you sell those shares.

I am sorry I should have told you I execute the NUA on January 4 2019.I started reviewing the 1099R and the NUA transaction when I identify a mistake in my 2019 1040 prepared by my accountant.The NUA was moved from the Schwab 401k account to Schwab taxable account. All other monies in the account was moved around same time as the NUA to Fidelity.The 1099R in box 1 shows the 2322 shares of Humana stock. Box 2a  and 14 shows the taxable portion (cost basis). Box  6 shows the NUA amount.I do not see the cash portion in the Fidelity IRA account and I do not see it in Schwab taxable account.I rechecked my checking account back in January 2019 and I do not recollect receing a large check from Schwab in 2019.I will be calling Schwab Monday for what happen to the cash portion when the NUA was executed as well as movement of other moneys to IRA.Thanks for the quick response. Is there any gaps in my thinking? 

I assume those 1099R boxes match up as follows:  Box 1 dollar amount equals the value of the shares X 2322, 2a equals the cost basis per share X 2322, and Box 6 equals the NUA amount per share X 2322.  If so, everything appears to be OK except determining the disposition of the cash. Either your cash interest in the unitized fund should be paid to you or converted into shares of employer stock. Maybe the plan can explain which it was.


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