- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
2019 used NUA strategy to distribute 401(k) as "Lump Sum In-Kind Shares" into brokerage acct. 2020 sold a few shares; How is the cost basis calculated & the sale taxed?
The distribution met the "net unrealized appreciation" rules:
(1) The "triggering event" was "separation from service".
(2) The 401(k) company stock shares were transferred "in-kind" (without liquidating it) to a taxable brokerage account).
(3) At distribution into the brokerage account (2019), I claimed the tax liability that I owed, which was the ordinary income tax due on the cost basis.
In 2020 I sold a few of the stocks. The number of shares sold was not greater than my initial cost basis (prior to the "in-kind" distribution).
I received a 1099-B for the sale, but the "cost basis" was left blank.
My questions:
1) How do I determine the cost basis on the shares that were sold? Are they calculated from the value of the shares at the date of distribution into the brokerage account?
2) Am I correct in thinking that "long-term" capital gains tax rates apply to the NUA assets as of the date of the distribution, regardless of the subsequent holding period?
3) How do I use the TurboTax program to calculate/claim/pay my tax liability for the sale?
Thanks in advance for your feedback...
(1) The "triggering event" was "separation from service".
(2) The 401(k) company stock shares were transferred "in-kind" (without liquidating it) to a taxable brokerage account).
(3) At distribution into the brokerage account (2019), I claimed the tax liability that I owed, which was the ordinary income tax due on the cost basis.
In 2020 I sold a few of the stocks. The number of shares sold was not greater than my initial cost basis (prior to the "in-kind" distribution).
I received a 1099-B for the sale, but the "cost basis" was left blank.
My questions:
1) How do I determine the cost basis on the shares that were sold? Are they calculated from the value of the shares at the date of distribution into the brokerage account?
2) Am I correct in thinking that "long-term" capital gains tax rates apply to the NUA assets as of the date of the distribution, regardless of the subsequent holding period?
3) How do I use the TurboTax program to calculate/claim/pay my tax liability for the sale?
Thanks in advance for your feedback...
Topics:
March 18, 2021
10:06 PM