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Author: RBS40 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121599  
Subject: Capital gains Date: 2/2/2000 2:48 PM
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The company I work for was recently bought out.

I bought shares in the company for $.20. The company that bought us is trading in the $230 range. I would like to gift my 2 kids (ages 7 & 9) $10k each in shares and put it in a custodial account to start saving for college.

If I sell all the stock I will have a large capital gain.

Is this a good idea or are there better ones??
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27040 of 121599
Subject: Re: Capital gains Date: 2/3/2000 6:12 PM
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<<The company I work for was recently bought out.>>

Congrats...

<<I bought shares in the company for $.20. The company that bought us is trading in the $230 range. I would like to gift my 2 kids (ages 7 & 9) $10k each in shares and put it in a custodial account to start saving for college.>>

That could work. You can read more about gifting shares to children in the Taxes FAQ area.

<<If I sell all the stock I will have a large capital gain.>>

Unless you have only a few shares, selling something for $230 that your cost basis is $.20 will likely cause a very large capital gain...yes.

<<Is this a good idea or are there better ones??>>

There may be better ideas. But without knowing more about your situation, it's impossible to tell. I would suggest that you sell one or two shares and spend a few hours with a qualified tax pro to review all of the issues and provide you with some ideas.

TMF Taxes
Roy

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