I think you have the info needed to decide as to how much, or if you want to sell. The method to exclude the NIIT using the worksheet for Form 8960 in TurboTax 2024 is clear. Looking at my TT for 2025, it appears to be the same.
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Subject NUA Question
Following my retirement, I transferred shares of company stock held in my 401k to a taxable account over one year ago.
There has been no dividend reinvestment nor purchases or sales of the company stock since.
The cost basis is 100,000. The value was 600,000 when moved to a taxable account, meaning 500,000 NUA would be the LTCG if I sold all the stock and it was still worth 600,000.
Today the stock is worth 700,000 and so I will have another 100,000 of potential LTCG.
I am considering selling half of the shares, which would result in 700,000/2 = $350,000 of proceeds which would have a cost basis of 100,000/2 = 50,000.
I believe I will have a LTCG of 350,000 – 50,000 =300,000. I believe that the portion of that LTCG that is exempt from NII tax is 500,000/2 = 250,000 and the remaining portion of that LTCG that is subject to NII tax is 100,000/2 = 50,000
Question:
Is my assumption that 50,000 is subject to the NIIT correct?
I am aware that sales from an NUA are LTCG regardless of the holding period and not subject to the NIIT. The exemption for the NIIT is claimed in the TurboTax Worksheet for Form 8960.
