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NUA: cheaper tax on company stock in your 401(k)

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If your 401(k) holds a lot of your own company's stock, you can get a tax break when you leave — instead of rolling the shares into an IRA, you move them to a taxable account. You pay regular tax only on what the plan paid for them (the cost basis), and the rest is taxed as capital gains when you sell. On $500,000 of stock with a $100,000 cost basis, NUA can save $36,000 in federal tax compared with an IRA rollover. But you must move the entire 401(k) balance in one year.

Good for: Workers with big gains in their own company's stock inside a 401(k).

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Educational summary, not tax advice. Limits and rules change — confirm current law with your tax adviser.