If you’ve been following our series on Net Unrealized Appreciation (NUA), you’re already familiar with it as a powerful tax strategy for PACCAR employees holding company stock in their 401(k). From reducing ordinary income tax exposure to supporting charitable giving and long-term planning, NUA offers meaningful financial advantages.
But how do you actually put this strategy into motion?
That’s where many people hesitate—and understandably so. The NUA process involves multiple steps, requires precise timing, and often includes coordination between Fidelity, Equiniti Trust Company (EQ), and your custodian. But don’t worry—we’re here to walk you through it.
Let’s break it down.
The NUA strategy is set in motion when you take a lump-sum distribution of your 401(k) after a qualifying event—typically retirement. The goal is to move your PACCAR stock from a tax-deferred environment (your 401(k)) into a taxable brokerage account where the growth (appreciation) will be taxed at capital gains rates, not ordinary income rates.
However, to make that happen, a very specific chain of events needs to be carefully orchestrated.
The first step to take if you are considering an NUA strategy is to consult with a financial and tax advisor who will help you evaluate your situation. If it’s determined that an NUA strategy is the right course of action for you, we will help guide you through the following process to implement your NUA strategy.
Allworth Financial will coordinate a conference call with Fidelity Retirement Brokerage Services to initiate the process. On the call, you’ll confirm that you want to distribute your account and trigger the NUA strategy.
Fidelity will provide the number of PACCAR shares in your 401(k), along with the cost basis (the original value used for tax calculations). This is critical—we’ll document this carefully and show you what form to provide your accountant for future tax reporting.
Your PACCAR stock is transferred in-kind from Fidelity to the transfer agent: Equiniti Trust Company. This keeps the shares intact and avoids any unintentional sales that could trigger taxes.
The remaining 401(k) balance (non-stock PACCAR holdings) is liquidated, and a check is issued for rollover into your IRA. This amount is not taxed, as long as it’s handled correctly as a direct rollover.
You’ll receive two critical documents:
Once your shares are held at EQ, we’ll assist in transferring them to your preferred brokerage account (e.g., Schwab, Fidelity, Vanguard). This allows you to manage or sell your stock as part of your broader portfolio strategy.
Do I have to sell the stock right away?
No, you can hold the PACCAR stock as long as you want. In fact, many clients employ a staggered sale strategy to manage taxes and diversify their investments gradually.
What if I want to donate some of the stock?
That’s a great option. Once the shares are in a taxable account, you can gift them to a charity or donor-advised fund and avoid capital gains tax on the appreciated value.
How long does this all take?
Generally, the process takes 2–4 weeks, depending on how quickly documents are signed and transfers are processed. Timing is critical—especially if you’re coordinating with a retirement date, Social Security, or required minimum distribution (RMD) deadlines.
NUA is a powerful tool—but one that’s easily misused if the process is not followed correctly. Here are a few common pitfalls we help clients avoid:
At Allworth, we’ve walked PACCAR clients of ours through this process. We don’t just tell you what to do—we help you do it, step by step. That means:
You’ve worked hard and saved diligently—now it’s time to make your PACCAR stock work for you. Whether you’re looking to reduce taxes, support causes you care about, or retire on your own terms, NUA can be a smart part of your plan.
We’re here to ensure everything goes smoothly.
Let’s walk through the numbers and see how it fits your unique retirement picture.
The information presented is for educational purposes only and is not intended to be a comprehensive analysis of the topics discussed. It should not be interpreted as personalized investment advice or relied upon as such.
Allworth Financial, LP (“Allworth”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of the information presented. While efforts are made to ensure the information’s accuracy, it is subject to change without notice. Allworth conducts a reasonable inquiry to determine that information provided by third party sources is reasonable, but cannot guarantee its accuracy or completeness. Opinions expressed are also subject to change without notice and should not be construed as investment advice.
The information is not intended to convey any implicit or explicit guarantee or sense of assurance that, if followed, any investment strategies referenced will produce a positive or desired outcome. All investments involve risk, including the potential loss of principal. There can be no assurance that any investment strategy or decision will achieve its intended objectives or result in a positive return. It is important to carefully consider your investment goals, risk tolerance, and seek professional advice before making any investment decisions.