NUA - Sale Of NUA Shares And Post NUA Gains All At One Time

Forum|Forum|1 year ago
November 18, 2024
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Upon my retirement in 2007, I utilized the NUA option to transfer the shares of my company stock held in my 401K (ER Stock Contribution) to a taxable brokerage account. I received the 1099-R from the brokerage house and I paid the tax for the cost basis.

The market value of the shares has increased significantly since 2007.

I believe the value of the shares beyond the NUA will be taxed as long term capital gains (assuming no short term gains).

Question:

If I sell all the shares, will the brokerage house provide two 1099's? I.e. A 1099 for the the gain of the shares after the NUA and a 1099-R for the NUA?

Thanks in advance..

Best answer by dmertz

"will the brokerage house provide two 1099's? I.e. A 1099 for the the gain of the shares after the NUA and a 1099-R for the NUA?"

You mean 1099-B, not 1099-R. The 1099-R showing the distribution of NUA was issued in 2007. With only long-term capital gains, there is no need for separation. Your cost basis is simply the basis that the NUA shares had, The gross value of the shares distributed in 2007 minus the amount shown in box 6 of your 2007 Form 1099-R. It's likely that the Form 1099-B that you receive for the sale of the NUA shares would indicate Code E is to be used on Form 8949 to indicate a long-term investment for which cost basis is not being reported by the broker.