The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Transfer stocks to nephews||Date: 11/18/1998 11:12 AM|
|Author: TMFTaxes||Number: 6361 of 122503|
[[I have 2 nephews (6&10) that I opened brokerage accts for but have not yet funded. I would like
to know the tax ramifications for me if I transfer some stocks I now own to them. ]]
Without knowing more about the accounts, it's impossible to really provide any information. Are the accounts in your name, simply "earmarked" for the kids? Or are these UGMA/UTMA accounts? Or are they other custodian type accounts with you as the custodian? Whose social security number will the account be reported to? You? The kids?
I just need some additional information on this issue because it is the crux of the matter.
have some short&long term capital gains this year that I need to offset with either selling some
lagging stocks that need time to recover (oil service) or transferring them to the youngsters accts.]]
A transfer would do you no good at all.
[[ Would transferring them give me the loss I need to offset my gains, or would it just give my
nephews the benefit when they recover and sell them? The stock current value would be approx
$2k each child, although I paid approx $4k.]]
In generally, you NEVER want to gift DEpreciated shares of stock. You are much better selling the stock, taking the loss, and then gifting the cash.
But you have a number of issues here that you need to do a bunch of additional reading. You can find posts regarding gifting of stocks, the basis rules, the gift tax rules, and the kiddie tax rules all in the Taxes FAQ area (some are in the "archives" section...some are "up front"). You really need to spend some time reading that information (since you need the backround in order to take this discussion further).
Then I would suggest that you visit the Fairmark tax site (http://www.fairmark.com) and read the discussion there about UGMA/UTMA accounts. That will give you some idea of what you might be getting into.
Finally, the gift of stock issues are discussed in detail in The Motley Fool Investment Tax Guide. You might also want to check that out since you are obviously new to taxes and investing.
Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|