![Capital Gains From Retirement Accounts Capital Gains From Retirement Accounts](https://eu-images.contentstack.com/v3/assets/bltabaa95ef14172c61/blt89f81878e898f92b/6733ff7703bd4054bfcbad70/hoyt-promo.jpg?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
Usually, a distribution from a qualified retirement plan is taxed as ordinary annuity income.1 However, a special rule applies when appreciated employer securities are received in a lump sum distribution from an employer retirement plan, such as from an Internal Revenue Code Section 401(k) plan or an employee stock ownership plan. The net unrealized appreciation (NUA), which is the growth in the value of the employer stock while it was held by the qualified retirement plan, is excluded from income in the year of distribution.2 The retirement plan administrator will inform the recipient of the amount of the NUA on Form 1099-R. The NUA amount will be taxed as a long-term capital gain (LTCG) whenever the stock is sold, even if the stock is ...
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