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Financial Planning / Tax Strategies
|Subject: Almost worthless stock - strategy question(s)||Date: 7/31/2003 9:56 PM|
|Author: cstrohm||Number: 66340 of 121774|
First time poster on this board. Thought I'd try to pick your collective brains over here. Sorry about the length - I'll try to keep it short.
Mom holds 400 shares of Lucent Technologies with a basis of about $36.00 per share.
Shares were bought jointly when Dad was alive.
Dad died in Sept., 2002 when LU was at $1.00
Mom has income of about $12,000 per year from Social Security, pension, annuities, IRAs, etc.
Mom pays next to no federal taxes.
Both my sister and I are in the 28% bracket.
(1) We were told one half of the LU shares Mom holds have assumed a basis price of $1.00 (instead of $36.00) because of Dad's death. Is that right?
(2) Mom wants to get rid of all 400 shares. Can she give them to my sister and me and then we sell them and use the losses? Based on the answer to question #1 above, she'd either give us all 400 or sell the 200 that have a basis of $1.00 and give us the other 200. Basically, can we use the losses from a gift of stock? She can't.
(3) Mom gives us money each year but always under the annual $11,000 gift exclusion amount. Would the gift of the stock be valued at the basis cost or at the current value for the $11,000 limit?
Thanks in advance.
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