Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
Co. Stock Fund Converted to Stocks - LTCG or STCG
Posted by: Patchkit22, October 12, 2017 10:34PM
Left co. after 15 yrs. Part of 401K was invested in company stock fund. At exit, opted to convert stock fund to equivalent shares of company stock to take advantage of NUA. Received 1700 shares at a cost basis of $7.50/share on Sept 2, 2017.

If I sell these stocks next month, would I be subject to LTCG taxes or STCG taxes in FY17?

I'm confused because I've read you have to have the asset for 1 year. Since I've had the stock fund for 15 years, does this qualify? Or, is the effective date of ownership for LTCG the day I received equivalent shares?

Appreciate clarification.

Re: Co. Stock Fund Converted to Stocks - LTCG or STCG
Posted by: orgman, October 17, 2017 02:50PM
Presuming you received a lump sum distribution of your full account when you left the company, you were eligible for long term capital gains on the company stock upon the distribution. There is no holding requirement once you received the shares to qualify for long term capital gains.

And there was no holding requirement while in the plan either. That's how net unrealized appreciation (NUA) works.



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