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. Rollover

    A rollover is when you do the following: 1. Reinvest funds from ...
  5. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  6. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
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