4.6.6 Basic Quiz -- Net Unrealized Appreciation

Some retirement plans are permitted to hold stock of the employer.

True False

At retirement some employers give the retiring employees company stock.

True False

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.

True False

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.

True False

It is permissible to fund a CRT with NUA stock.

True False

NUA stock can be sold without paying any tax by using a sale and unitrust.

True False

If a retired employee has all or most of his or her retirement plan in company stock, it is a good idea to diversify.

True False

Using a unitrust and sale with NUA stock allows the retiring employee to diversify his or her retirement account.

True False

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.

True False

The net unrealized appreciation is equal to the fair market value of the employer's stock received by the retiring employee and the employee's cost basis in that stock.