Net unrealized appreciation, or NUA, is the gain on employer stock that has not been sold yet, and therefore no income tax has been paid on. The term is a term of art for employer stock held inside a qualified plan, such as a 401(k). This article focuses on the federal tax treatment of NUA transactions; state treatment could vary.
An NUA strategy delivers significant benefits when requirements centered on eligibility, a triggering event and the timing rules that follow it are met and are all set out in the plan documents.
Please read important disclosures here.
