If your employer stock is highly appreciated and the distribution qualifies as a lump-sum distribution (LSD), then you can elect to use the NUA option.

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But for our purposes, LSD is just an acronym for a plain old boring lump-sum distribution.

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That's true even if you sell the shares the day after the distribution from your plan, since the rule requiring you to hold the stock more than one year to qualify for long-term capital gain rates does not apply to NUA stock withdrawn as part of an LSD.

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