Glossary
Net unrealized appreciation
Also called NUA
Definition
Net unrealized appreciation (NUA) is the growth in value of employer stock held in a workplace plan above its cost basis. Distributed in kind as part of a qualifying lump sum, the basis is taxed as ordinary income and the NUA at long-term capital gains rates when sold.
How net unrealized appreciation works
The strategy requires a triggering event and distribution of the entire account within one tax year.
Rolling the stock to an IRA instead forfeits NUA treatment permanently.
Why it matters to a firm
NUA decisions are one-time and can be worth a lot; they need coordinated tax and investment advice.
| 2026 figure | Source |
|---|---|
| Long-term capital gains rates: 0%, 15% or 20% depending on income | IRS |
Calculators that use net unrealized appreciation
Questions about net unrealized appreciation
Is NUA taxed at distribution?
No, only the cost basis is.
Can I undo a rollover?
No.
Must I take the whole account?
A lump-sum distribution of the whole plan balance is required.
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Related terms: Long-term capital gains
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