Chartered Retirement Planning Counselor (CRPC) 2025 – 400 Free Practice Questions to Pass the Exam

The term that describes the increase in value of shares distributed from a qualified stock bonus plan is known as net unrealized appreciation. This concept refers to the appreciation in value of shares that have not yet been sold or converted to cash. In the context of retirement plans, such as a qualified stock bonus plan, participants may receive stock as part of their retirement benefits. The net unrealized appreciation represents the difference between the value of the stock at the time of distribution and the original cost basis of the stock, which is not taxed until the shares are sold.

Understanding this term is important because it highlights a tax advantage associated with holding stock in such plans. By allowing the appreciation to remain unrealized until the stock is sold, it can potentially reduce the overall tax burden when the shares are eventually liquidated. Thus, it captures a key principle in retirement planning and taxation related to employer-sponsored retirement plans and their beneficial treatment under tax laws.