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GiftLaw Pro Home   >  Chapter 4 - Specific Property Gifts  >  4.6 IRA, Pension and IRD  >  4.6.6 Net Unrealized Appreciation  >  Basic Quiz

Basic Quiz - 4.6.6 Net Unrealized Appreciation

1. Some retirement plans are permitted to hold stock of the employer.
           
2. At retirement some employers give the retiring employees company stock.
           
3. When a retiring employee receives company stock at retirement, the employee must report the fair market value of such stock as ordinary income in the year of retirement.
           
4. The retiring employee who receives company stock at retirement must hold that stock for more than one year in order to realize long term capital gain on the sale of that stock.
           
5. It is permissible to fund a CRT with NUA stock.
           
6. NUA stock can be sold without paying any tax by using a sale and unitrust.
           
7. If a retired employee has all or most of his or her retirement plan in company stock, it is a good idea to diversify.
           
8. Using a unitrust and sale with NUA stock allows the retiring employee to diversify his or her retirement account.
           
9. If a unitrust and sale technique is used to achieve tax-free diversification, the donor must be aware that the charitable deduction for creating the CRT is limited to 30% of AGI.
           
10. The net unrealized appreciation is equal to the difference between the fair market value of the employer's stock received by the retiring employee and the employee's cost basis in that stock.