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Posted by Arthur Kamlet on January 15, 2007, 2:07 am
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> I can take part of my rollover in "equivalent whole shares"
> of my previous employer's company stock in which my basis is
> about 50% of the current price.
>
> My understanding, which I'd like a second opinion on, is
> that I can walk with this stock, put it in a regular
> brokerage account and:
>
> 1) Have to pay taxes on the basis this year as ordinary
> income. There's no withholding, so I have to either goose up
> my W4 withholding and/or file some 1040ES payments to avoid
> penalties next spring.
>
> 2) Lock in all of the rest of the gain as unrealized long
> term capital gain taxable at the investor-preferred rate.
>
> 3) Have the purchase date, for purposes of considering any
> **future** gains/losses in these shares as short- or
> long-term, set at the date of the rollover transaction.
>
> 4) I'd have to start paying taxes on, presumably, qualified,
> dividends while I hold the shares and they keep paying the
> dividend.
>
> If I go this route, one year from the rollover, ALL capital
> gains over the basis can be realized and treated as
> long-term capital gains.
>
> Does this sound right?
The advantage of taking company stock as stock is you get to
use the NUA (Net Unrealized Appreciation) as listed on the
form 1099-R as long-term gain rather than ordinary income.
--
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
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