Getting the Most From Your Employer's Stock

Company stock has made many employees rich on paper, but it can also extract a painful tax hit. When you retire, you'll have to make some weighty financial decisions about what to do with the employer stocks or bonds you hold in your 401(k), profit-sharing plan or stock bonus plan.

If you find yourself in this situation, you should be aware of a unique benefit, known as the net unrealized appreciation (NUA) rule, that could save you money on taxes. NUA refers to the net unrealized appreciation on company stock, and the rule reduces how much you'll be taxed on that appreciation.

But it applies only to company stock. It won't work for mutual funds or securities you own in other companies. ...