Does Turbo Tax handle a NUA (Net Unrealized Appreciation) from a 401k? I don't want to start with TurboTax if they cannot do what I will need this year.
Does Turbo Tax handle a NUA (Net Unrealized Appreciation) from a 401k? I don't want to start with TurboTax if they cannot do what I will need this year.
If you pull the company stock out of your former employer’s 401(k) plan in a lump-sum distribution, tax is deferred on the NUA until you sell the stock (you still must pay tax on your cost basis at your ordinary tax rate).
When you do sell the company stock, the NUA is taxed at the rates for long-term capital gain.
Any gain exceeding the NUA - the gain since taking the stock out of the former employer’s 401(k) plan - is taxed as long-term or short-term capital gain, depending on how long you held the stock after pulling it out of the 401(k) account (short-term gains are taxed at your ordinary tax rate).