taxdean
I struggled for some time to figure how to report the NUA.
One day it dawned on me that it's far simpler than what I was and you are thinking.
I invite others to respond but here's what I did.
My research came to the conclusion you only report the NUA amount from box 6 on your 1099-R regardless of the time held or the value at the time of the sale.
Step 1
- Determine how many shares you have to sell at the current price to equal the dollar amount of the NUA in box 6 of the 1099-R. Then sell those shares and report the sale as follows.
- The sale is reported under Investment Income, Stocks as a 1099-B, not in the section Retirement/1099-R. The 1099-R would have been reported in the section Retirement/1099-R in the year you took the NUA.
- NUA's are taxed as LTCG regardless of the time held.
- Report the NUA amount from box 6
less your cost basis from the 1099-R, box 2a on the Form 8960 WORKSHEET in the section for Line 5b - Adjustments. On the last line titled "Net gain or loss from disposition of property not subject to net investment tax".
Step 2:
- For the shares sold that were from transactions in addition to and following the date of the NUA, I made a new stock sale entry for those shares in TTax. I reported those also under Investment Income, Stocks as from a 1099-B. Mine were all LTCG which I sold on a single date. If you have sales on different dates or with STCG you'll have to make another entry for each sale date.
- I reported the purchase date as Various.
