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Financial Planning / Tax Strategies


Subject:  Re: Gifting stocks Date:  2/4/2008  6:02 PM
Author:  TMFPMarti Number:  98304 of 127639

Specifically what if I give stock to a child to sell to pay for college expenses? Do I side step the cap gains tax and my child has gains based on the value of the stock at the time of the gift?

No. The recipient gets the stock with your basis and holding period and will calculate gain accordingly. What the recipient does with proceeds of sale afterward doesn't matter. The special rules for charitable contributions are irrelevant. See IRS Publications 550 and 551.

If the current value of the stock plus all other gifts to the same recipient during the year is greater than $12,000 you also have gift tax concerns.

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