A client aged 60 receives a lump-sum distribution from his employer's qualified plan and his employer's stock has Net Unrealized Appreciation (NUA) of $40,000. How is the NUA taxed when he later sells the stock?
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A
As ordinary income in the year of distribution
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B
As long-term capital gains when the stock is sold
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C
As ordinary income when the stock is sold
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D
Tax-free due to the employer stock exclusion