Some companies offer the benefit of employees owning stock in the employer company. The idea is that this creates an ownership mentality in the employees, even if they own a very small percentage of total shares. The net unrealized appreciation (NUA) is the difference in value between the average cost basis of shares of employer stock and the current market value of the shares. The NUA is important if you are distributing highly appreciated employer stock from your tax-deferred employer-sponsored retirement plan, such as a 401(k).
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