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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

July/August 2025

Net Unrealized Appreciation and Your 401(k)

Smiling Senior Couple Sitting Around Table At Home Reviewing Finances

If your 401(k) plan account contains employer stock, the tax law's net unrealized appreciation (NUA) provision may allow you to take advantage of potentially lower tax rates on the growth or unrealized appreciation of the stock.


How It Works
Normally, distributions from a traditional 401(k) are taxed as ordinary income. Under the NUA provision, you can separate the appreciation of your employer stock from other assets in your 401(k) at retirement. When you eventually sell your stock, the NUA will be taxed at the generally lower long-term capital gains rate. You typically need to separate from your employer through retirement or other means and take a qualified lump-sum distribution of your entire plan balance to take advantage.


Here's an Example
Twenty years ago, Taylor received a $50,000 company stock 401(k) contribution. Today, upon her retirement, the stock is worth $200,000. Instead of rolling everything into an IRA, Taylor is taking a separate stock distribution. Ordinary income tax will be due only on the $50,000, while the $150,000 appreciation would be subject to capital gains tax when sold.*


Your trusted professional can help determine whether this fits your broader retirement and investment strategy.


*This is a hypothetical example and is not representative of any investment strategies. Actual results my vary.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
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