Partial NUA Optimization Calculator
Most employees accumulate employer stock over many years at widely varying prices — some lots at a 12x gain, others barely above breakeven. Blanket NUA or blanket rollover usually leaves money on the table. Enter two lots and this calculator shows all four scenarios, ranked by after-tax outcome.
How to read these results
Each scenario distributes the same total stock value — what changes is the tax rate applied to each piece. The model accounts for the opportunity cost of paying ordinary income tax on the cost basis today (that money can't compound), which is why very low-appreciation lots often favor rollover even when your LTCG rate is below your ordinary rate.
The four scenarios are:
- NUA Lot A, roll Lot B — distribute Lot A in-kind (pay ordinary on its basis now; pay LTCG on appreciation at sale); roll Lot B to IRA (pay ordinary on full future value later).
- NUA Lot B, roll Lot A — same logic with the lots reversed.
- NUA all shares — distribute both lots in-kind.
- Roll all to IRA — entire position deferred; pay ordinary income on everything at withdrawal.
When partial NUA beats full NUA
Partial NUA consistently outperforms full NUA when:
- Lot B has a low appreciation ratio (<2x). The immediate ordinary income tax on a large cost basis costs more than the future LTCG savings from converting that modest appreciation.
- You expect to convert the IRA in low-income years (e.g., early retirement before Social Security + RMDs compound). The rolled portion can be Roth-converted at 12–22%, a better outcome than NUA at your current 32%.
- Lot B is earmarked for a charity or donor-advised fund. Donating the IRA directly as a qualified charitable distribution (QCD) up to $111,000/year (2026 limit) eliminates the IRA's ordinary income entirely.2
Related tools and guides
Get your actual lot breakdown modeled
The two-lot model is a useful approximation. A specialist advisor works through your actual plan statement — every lot, your state tax rate, Roth conversion runway, RMD projections, and estate plan. Free match, no obligation.
Sources
- IRS Publication 575 — Pension and Annuity Income: lump-sum distribution requirements and NUA rules under IRC § 402(e)(4).
- IRS — Qualified Charitable Distributions: $111,000 QCD limit for 2026 per IRS Notice 2025-82.
- IRS Tax Topic 412 — Lump-Sum Distributions: qualifying events and one-taxable-year requirement.
- IRS Publication 550 — Investment Income and Expenses: long-term capital gains rates and NIIT (§ 1411) at 3.8% on net investment income above $200K single / $250K MFJ.
Tax figures verified against 2026 IRS guidance. Results are directional estimates — not tax advice. Actual outcomes depend on your specific situation, state tax law, plan document rules, and IRS determination of qualifying-event timing.