NUA
Business & Finance abbreviation · Personal Finance
| Stands for | Net unrealized appreciation |
|---|---|
| Categories | Business & Finance |
NUA stands for Net unrealized appreciation, a personal finance abbreviation.
Rise in value of employer stock held inside a 401(k) or similar plan since it was purchased. When the shares are distributed in kind as part of a lump-sum distribution, only the original cost basis is taxed as ordinary income, and the appreciation is taxed at long-term capital gains rates when sold.
Example: With $400,000 of company stock bought for $50,000, the NUA strategy could cut his tax bill substantially.
Usage notes
The strategy requires a triggering event such as separation from service or reaching age 59½, and the entire plan balance must be distributed within one calendar year. It loses its appeal when the cost basis is high relative to the stock's current value, so a tax professional's analysis is usually advised.
Related abbreviations
More personal finance abbreviations
- IVA – Individual voluntary arrangement
- LCOL – Low cost of living
- LISA – Lifetime ISA
- LPFSA – Limited-purpose flexible spending account
- MMA – Money market account
- NPS – National Pension System
- P2P – Peer-to-peer payments
- PIA – Primary insurance amount
- POD – Payable on death
- PPF – Public Provident Fund
- PSLF – Public Service Loan Forgiveness
- QDRO – Qualified domestic relations order