Net Unrealized Appreciation - NUA


DEFINITION of 'Net Unrealized Appreciation - NUA'

The difference in value between the average cost basis of shares and the current market value of the shares held in a tax-deferred account.

BREAKING DOWN 'Net Unrealized Appreciation - NUA'

The NUA is important if you are distributing highly appreciated company stock from your tax-deferred employee-sponsored retirement plan, such as a 401(k). Upon the distribution the NUA is not subject to ordinary income tax. For this reason it may be better to transfer the company stock to a regular brokerage account instead of rolling the stock over to a tax-deferred IRA: that is, if rolled over to an IRA, the company stock's NUA would eventually be taxed at your ordinary income tax rate (when you take distribute the stocks).

  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Capital Appreciation

    A rise in the value of an asset based on a rise in market price. ...
  3. Cost Basis

    1. The original value of an asset for tax purposes (usually the ...
  4. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  5. Rollover

    A rollover is when you do the following: 1. Reinvest funds from ...
  6. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
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  1. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>
  2. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>
  3. Are catch-up contributions included in actual deferral percentage (ADP) testing?

    Though the Internal Revenue Service (IRS) carefully scrutinizes the contributions of highly compensated employees (HCEs) ... Read Full Answer >>
  4. Who offers 401(k) plans?

    401(k) plans are one of the most common retirement plans available. A 401(k) plan must be offered by a business. These plans ... Read Full Answer >>
  5. Can a 401(k) be used for a house down payment?

    A 401(k) retirement plan can be tapped to raise a down payment for a house. You can either borrow money or make a withdrawal ... Read Full Answer >>
  6. How old do I have to be to make catch-up contributions?

    Most retirement plans such as 401(k), 403(b), individual retirement accounts (IRAs) and Roth IRAs allow for catch-up contributions ... Read Full Answer >>

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