Free net unrealized appreciation (nua) calculator
See the tax you save by using NUA on employer stock — basis taxed as ordinary income, appreciation at capital gains — updated live, as you type.
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ROI = (gain − cost) ÷ cost × 100. This is simple ROI and does not account for time value of money.
Results are estimates. Consult a professional.
What is net unrealized appreciation (NUA)?
Net unrealized appreciation (NUA) is a tax strategy for employer stock held inside a 401(k). It lets you pay ordinary income tax on only the stock's original cost basis when you take it out, and then pay the lower long-term capital gains rate on all the growth when you eventually sell. This NUA calculator estimates the tax you save versus the usual approach of rolling everything into an IRA and paying ordinary rates on the whole amount.
The mechanics matter because company stock often grows far beyond what was paid for it. If you simply roll a 401(k) full of appreciated employer shares into an IRA, every future withdrawal is taxed as ordinary income — the highest rate. NUA splits the stock in two: the small basis is taxed now at ordinary rates, and the large appreciation is taxed later at capital gains rates that are usually much lower.
How NUA taxes employer stock
To use NUA you take the employer shares in kind as part of a qualifying lump-sum distribution and move them into a taxable brokerage account — not into an IRA. Two different tax treatments then apply:
- Cost basis → ordinary income now. You pay ordinary income tax (and possibly the 10% early penalty if under 59½) on just the basis in the year of distribution.
- NUA → long-term capital gains later. The appreciation is not taxed until you sell, and then always as a long-term capital gain — even if you sell the next day.
How to use the NUA calculator
Four inputs drive the estimate, and the result updates live:
- Cost basis — what the plan paid for your employer shares (your plan statement or administrator can supply this).
- Current FMV — the fair market value of the shares at distribution.
- Ordinary income tax rate — your marginal federal rate; it applies to the basis under NUA, or to the whole amount without it.
- Long-term cap gains rate — the rate (0%, 15%, or 20%) that applies to the NUA when you sell.
The calculator returns the estimated tax saved by using NUA instead of rolling the stock into an IRA and paying ordinary rates on everything.
A worked NUA example
Robert holds employer stock in his 401(k) with a cost basis of $50,000 that is now worth $400,000. His ordinary rate is 24% and his long-term capital gains rate is 15%.
Step 1 — Find the NUA
Step 2 — Tax each piece under NUA
Step 3 — Compare to a full IRA rollover
When NUA wins — and when it does not
NUA pays off most when the gap between the basis and the value is large and the spread between your ordinary and capital gains rates is wide. The table shows how the saving grows as the appreciation grows, holding the $50,000 basis, 24% ordinary rate, and 15% capital gains rate fixed.
| Cost basis | FMV | NUA | Tax saved vs. IRA rollover |
|---|---|---|---|
| $50,000 | $100,000 | $50,000 | $4,500 |
| $50,000 | $200,000 | $150,000 | $13,500 |
| $50,000 | $400,000 | $350,000 | $31,500 |
| $50,000 | $600,000 | $550,000 | $49,500 |
Basis $50,000, ordinary rate 24%, capital gains rate 15%. Savings = FMV × 24% − (50,000 × 24% + NUA × 15%). Figures computed by this calculator.
- NUA wins when the stock has appreciated heavily and your capital gains rate is well below your ordinary rate.
- NUA is weak when the basis is a large share of the value — there is little appreciation to shift to the lower rate.
- NUA can backfire if you are under 59½ and owe the 10% penalty on the basis, or if a single concentrated stock position is too risky to hold.
NUA rules and mistakes to avoid
- Rolling the stock into an IRA first. Once the shares are in an IRA the NUA election is lost forever — the stock must come out in kind to a taxable account.
- Missing the lump-sum requirement. NUA requires a qualifying lump-sum distribution of the entire account in one tax year, triggered by separation from service, reaching 59½, death, or disability.
- Forgetting the 10% penalty on basis. If you take the distribution before 59½, the ordinary-income basis can also face the 10% early-withdrawal penalty.
- Holding a dangerously concentrated position. The tax saving is only worth it if you are comfortable keeping a large single-stock holding; diversification risk can outweigh the benefit.
- Ignoring state tax. The calculator estimates federal tax only; your state's treatment of the basis and the gain can change the math.
Accuracy, assumptions, and sources
This NUA calculator taxes the cost basis at the ordinary rate and the net unrealized appreciation at the long-term capital gains rate, then compares the total to a full IRA rollover taxed entirely at ordinary rates — the core of the strategy described in IRS Topic 412. It estimates federal income tax only and excludes state tax, the possible 10% early-withdrawal penalty on the basis, and the net investment income tax. NUA is irreversible and fact-specific, so this is a planning estimate, not tax advice — confirm your basis with your plan administrator and review the strategy with a tax professional using the IRS sources below.
IRS Topic no. 412 — Lump-sum distributions and net unrealized appreciation in employer securities.IRS Publication 575 — Pension and Annuity Income (NUA treatment of employer securities).Frequently asked questions about the free net unrealized appreciation (nua) calculator
About this Net Unrealized Appreciation (NUA) calculator
This NUA calculator estimates the federal tax you save by using net unrealized appreciation on employer stock held in a 401(k). It taxes the cost basis at your ordinary rate and the appreciation at the long-term capital gains rate, then compares that to rolling the stock into an IRA and paying ordinary rates on the whole amount.
Browse our other retirement calculators or the full calculators directory. NUA is irreversible and fact-specific, so this is a planning estimate, not tax advice.