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Author: lethean Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: gifting ? Date: 5/10/2012 1:12 PM
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I want to gift shares of stock to a son and his wife to add to their down payment for purchase of a first home. The gross amount that I want to gift is apprx $25,000.

Questions.

1. Since the stock is in my personal taxable account, do I need to gift shares to my son and his wife, separately? $12,500 each?

2. Or, can the gift be considered as coming from both my husband and myself even though my husband is not named as an owner on my account?

If the latter, it would give me more flexibility as to the total amount of the gift. Still thinking about that.

Capital gains on the stock are between $7800 and and $15,000 depending upon which shares I transfer (high basis or low basis shares). I believe that my son and his wife will remain well within the 15% tax bracket in 2012 which would allow them to sell the stock with 0% cap gain tax. I have a copy of their 2011 tax return and will run it through TT and the "what if" module to calculate the tax effect to them of selling the stock in 2012.

Originally, I had considered transfering/gifting shares from my husband's Roth account for the same purpose. But that Roth account is *gold* - converted over a period of 4 years. So that seems like a poor choice for the source of gifted shares given the alternative that's available, i.e., shares in my taxable account.

I'd appreciate an opinion on the 2 questions above and also whether I'm overlooking anything.

I usually think I know a little bit about taxes, but I tend to get somewhat rattled when I actually want to act on something. I understand that the stock will continue to have my cost basis after the gift of shares by transfer.

Does my thinking on this sound alright?

Thanks very much.

ML
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