Discussion:NET UNREALIZED APPRECIATION (NUA) TAX QUESTIONS
From TaxAlmanac
| Revision as of 19:55, 3 November 2009 Fsteincpa (Talk | contribs) (New Discussion) ← Previous diff |
Revision as of 20:03, 3 November 2009 Kevinh5 (Talk | contribs) (1014 DOESN'T APP) Next diff → |
||
| Line 37: | Line 37: | ||
| }} | }} | ||
| + | |||
| + | {{ForumReplyPost|UserID=Kevinh5|Date=3 November 2009|Text=1014 DOESN'T APPLY?}} | ||
Revision as of 20:03, 3 November 2009
Discussion Forum Index --> Advanced Tax Questions --> NET UNREALIZED APPRECIATION (NUA) TAX QUESTIONS
Discussion Forum Index --> Tax Questions --> NET UNREALIZED APPRECIATION (NUA) TAX QUESTIONS
| 3 November 2009 | |
| Ok - Posting this for my associate, he has tried researching and has not found anything useful as of yet. As for me, it just made my head hurt and figured you smarterer people would know.
Employee takes Lump-Sum Distribution of Company Stock, pays ordinary income tax on Original Basis and defers tax on NUA. Employee dies still owning Company Stock which is included in his Taxable Estate at FMV at Date of Death. Non-spousal Beneficiary #1 inherits stock with a basis decreased due to previously untaxed NUA. When Beneficiary #1 sells inherited stock, he or she pays Capital Gains Tax on previously untaxed UNA. Questions – Is Beneficiary #1 “forced” to sell the stock during his or her lifetime? Can he or she leave the stock to Beneficiary #2 in his or her will? If he or she does not sell any of the stock, does he or she pay income or capital gains tax on the previously untaxed NUA at time of his or her death? Does Beneficiary #2 receive a step-up in basis to the FMV of the stock on the Date of Death of Beneficiary #1? Does the previously untaxed NUA carryover to Beneficiary #2 through a decreased basis or other means? If Beneficiary #2 never sells the stock, does the previously untaxed NUA carryover to succeeding owners of the stock? Is the sale of the stock the only triggering event for the taxation of the previously untaxed NUA? If the stock is never sold and becomes worthless, is the previously untaxed NUA ever subject to tax (Capital Gain or Ordinary)? Is the “future” Capital Gains Tax on the UNA left in the Employee’s estate considered a debt of the decedent and deductible on Schedule K or elsewhere on Employee’s Form 706? | |
