NUA

A former employee spouse receives a distribution of company stock with an NUA from a 401K and meets all of the conditions required to take advantage of the NUA and pays ordinary income taxes on the basis of the stock.

The employee spouse then transfers the stock to their spouse (non-employee spouse). The non-employee spouse then passes away and the child of the non-employee spouse inherits the stock (employee spouse has not passed away).

What are the tax consequences when the child sells the stock?