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Net Unrealized Appreciation (NUA)

A tax strategy that allows you to take an in-kind lump-sum distribution of your company stock in a qualified retirement plan (e.g. a 401(k) plan) and pay income tax only on the average cost basis of the shares, not their current value. You can then defer the tax on any appreciation above the cost basis to when you sell it, paying capital gains tax on this increase. This is an alternative to rolling company stock into an IRA. See an FAQ about 401(k) plans.

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