So, is the intent to make Step 1 be the amount that is exempt from NII and Step 2 is the amount that is totally subject to NII? Isn't that going to cause a conflict versus the numbers on the forms the broker will send me after I see the stock and, if so, are you saying it doesn't matter?
Separately, I am not sure you correctly described the mechancs of Step 1. Suppose the stock at NUA time was worth $600k and the cost basis was 100k, so the NUA is 500k. It seems that your Step 1 says to use 500 - 100 = 400k as the entry not subject to NII, but I would think it is the entire 500k that is not subject to NII.
After we get through this, I will need to adjust for the fact that I am not selling all the stock in one year (and that i probably want to avoid selling the shares due to reinvested dividends after the NUA date, but let's table that for the moment.
Thanks again for all your help!
