When I retired in 2006, I used the NUA option to transfer my stock of my company from my 401k and ESOP to my brokerage account at big green investments.
I received a 1099-R and paid the tax on the original cost basis.
For simplicity:
The 1099-R shows a NUA amount of $200,000.
The shares have increased in value and are now worth $500,000.
We are residents of Arizona, a Community Property State.
The company shares in the brokerage account (and assumedly the NUA) are defined as Community Property in our Trust. As such, the non-IRA assets of each spouse receive a step-up to market value as of the date of death of the first spouse.
My wife died in early July 2023.
I had the cost basis of the non-NUA shares stepped up to market value on her DOD of $60 / share.
I understand that the NUA does not receive a step-up.
The price of the NUA shares is $3.50 / share.
To confuse the issue, I purchased and sold shares after the NUA.
Question:
How do I sell the remaining shares?
1. How do I avoid selling the LT taxable NUA shares until after selling all the shares with the step-up?
2. Do I sell Specific Shares?
3. Any flaws in my logic above?
Thanks in advance
