How to Calculate Net Unrealized Appreciation (NUA) for Company Stock
How to Calculate Net Unrealized Appreciation (NUA) for Company Stock If you have company stock inside your 401(k), you may be eligible for a powerful tax-saving strategy called Net Unrealized Appreciation (NUA). NUA lets you convert the growth in your employer stock into long-term capital gains—potentially saving you thousands compared to ordinary income tax rates. But it only works if you follow specific rules. In this guide, we'll explain how NUA works, how to calculate it, and when it makes sense to use it. 📌 Table of Contents What Is Net Unrealized Appreciation? How to Calculate Your NUA How to Use the NUA Strategy at Retirement Tax Treatment: NUA vs. Traditional IRA Rollovers When Does NUA Make Sense? What Is Net Unrealized Appreciation? Net Unrealized Appreciation (NUA) is the difference between the cost basis of employer stock held in a 401(k) and its market value at distribution. When you use the NUA strategy, the cost basis is taxed a...