Question
NUA capital gain
Hi Colleagues,
Client has a 1099-R for shares exercised from her ESPP in her IRA from a previous employer. The 1099-R has a value in Box 1, a value in box 2 and a value in box 6. The sum of boxes 2 and 6 equal box 1. This client also has a 1099-B with no cost basis.
Am I correct that box 2 is taxed as ordinary income and box 6 is the long term capital gain on this exercise. Therefore, I will back-in to the adjusted cost basis so that the NUA in box 6 is on schedule D as long term capital gain?
