Retirement

NUA (Net Unrealized Appreciation)

A tax strategy for employer stock in a 401(k) that taxes its growth at lower capital-gains rates.

What does nua mean?

With NUA, you pay ordinary income tax only on the stock’s cost basis at distribution, and the appreciation is taxed at long-term capital-gains rates when sold — often far less than rolling everything into an IRA where it would all be ordinary income.

Put it to use

Company Stock Distribution Analysis Calculator If you own company stock in a retirement plan you may be able to take advantage of using the long term capital gains tax rate rather than your ordinary income tax rate on this investment.

Related terms

Capital Gains Tax Cost Basis

All glossary terms