NUA and 60 days

I have 401k plan from previous work. I am over 60 years old and no longer work. My 401k consists of mutual funds. It also consists of company shares. Can I ask 401k administrator to directly rollover all my mutual funds and SOME of my company shares amount to IRA account and the remainder of company stock shares amount to be distributed directly to me. Would I be able then utilize NUA technique for the company shares amount that were directly distributed to me by ComputerShare (such as by check). If yes what would be mechanism for that? The reason I want to do it — that I have been told that I can use Frank Duke method — where the amount corresponding to cost of company shares would be put into IRA and the rest of company shares amount to be put into brokerage account. If that the case — how would 1099Rs look like? I understand the potential risks associated with Frank Duke method, which relies on private letter IRS ruling. Thank you.



  • As long as you understand the risks of the Frank Duke method, and that the IRS may reject it if they recognize that you used it, you could proceed with the LSD (which must be completed this year if you distribute the shares this year). 
  • Following is a lengthy thread on Frank Duke. It includes 1099R references:
  • https://irahelp.com/forum-post/17504-nua-lsd-401k
  • If your plan accounts for the cost basis on various tranches of NUA shares, you could combine that with the Duke method by rolling over the higher cost shares along with the other plan assets (direct rollover to IRA), leaving the lower cost basis shares for distribution. Then apply Duke method to the distributed shares by doing a 60 day rollover of the appropriate number of shares. If your plan uses the typical average cost basis method, then it does not matter which shares are rolled over or whether it is done as part of the direct rollover or you use a 60 day rollover yourself. Note that the 1099R will vary based on who does the rollover of the company shares to the IRA.


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