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Should you keep employer stock for NUA tax treatment?

If your 401(k) holds employer stock, you have a one-shot decision when you separate: roll everything into an IRA (everything becomes ordinary income later), or elect Net Unrealized Appreciation — pay ordinary tax now on the low cost basis, and long-term capital gains on the appreciation. The election is irrevocable.

This calculator gives a federal-only estimate. State tax, AMT, and NIIT are not modeled — use the recommendation as a directional guide, then verify with a CPA before executing.

What your employer paid for the stock when contributed. On 401(k) statement — “cost basis”.

Current fair market value of the employer-stock portion of your 401(k).

Used to discount the future LTCG bill to present value.

When NUA usually wins

  • Cost basis is a small fraction (<25%) of current value — most of the value is unrealized appreciation
  • You're in a high ordinary bracket today but expect a high bracket at retirement too
  • You plan to sell the stock within a few years (no long deferral benefit from a rollover)
  • You're 55+ separated from service, or otherwise penalty-exempt

When rollover usually wins

  • Cost basis is more than ~50% of current value — limited NUA upside
  • You expect your retirement bracket to be materially lower than today
  • You plan to hold the stock for 20+ years without selling — deferral compounds heavily
  • You're under 55 without a 72(t) exception — the 10% penalty on basis is expensive

Doing a full rollover too?

Generate a personalized $49 rollover plan covering the non-stock portion of your 401(k): custodian-specific transfer steps, 60-day deadline timeline, AMT modeling. Start the rollover plan →