From what I read, ESOP (which derives from heritage UTC) has a Net Unrealized Appreciation (NUA) rule which basically tax ESOP withdrawals as long-term capital gains instead of income… ok, fine?
(note: I contribute to Roth after-tax so not sure how that impacts my ESOP)
I learned about this because I was going to allocate all of my RTX Stock and ESOP funds, I haven’t ever allocated that company match (and RTX stock has been doing good so it wasn’t that bad).
However, as I was going to reallocate the ESOP, a warning came that doing so may remove the tax benefit ESOP carries with it…
So now I have no idea if it’s worth keeping it or not? To be honest, I do not understand this whole ESOP thing 100%, nor if I do qualify for the so called benefit which is NUA, I believe.
Would appreciate more insight into this by people that know about this… thanks!