Our client’s company stock, with a market value of approximately $113k, was transferred to a brokerage account using net unrealized appreciation (NUA) in February 2020. We placed tiered limit orders and sold 40 shares @ $400 in May 2020, paying 0% in capital gains because the taxable income for 2020 was only $73k.
We developed a strategy to sell another $16k of company stock in 2021, also at a 0% capital gains rate, to assist with cash flow and to continue to allow for Roth conversions without moving into the next tax bracket. This saved $18k in taxes because appreciation was taxed at 0% instead of what would have otherwise been 22%.
