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Author: fling Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 122643  
Subject: gifting stock to stay below Roth limit Date: 12/14/2000 2:21 AM
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Hello, I have a somewhat interesting situation.

I own about 200 shares of AXF, which, due to a merger, is providing a tender offer, the deadline of which is December 22 this year, and which has capital gains tax implications no matter what.

However, I rolled my sizable 401k into a Roth IRA this year, and am too close to the MAGI limit to be able to realize the gains. I also got a very large raise late this year, so it's doubtful I'll ever be able to roll it over in a future year, so I want to do it this year.

So, what I'm thinking of doing is gifting the 200 shares to my fiancee, who can then sell them immediately and pay the long-term capital gains tax on it. She's not in a lower bracket, but at least she doesn't need to stay under any limit. It's a little over $10,000, but I can just sell enough to get it under that and stay beneath the IRA limit.

From what I've read at the IRS site and on the FAQs here, this should be fine. Anyone know if I'm missing anything, or if I have a better alternative? Thanks in advance!
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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42895 of 122643
Subject: Re: gifting stock to stay below Roth limit Date: 12/14/2000 8:41 AM
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So, what I'm thinking of doing is gifting the 200 shares to my fiancee, who can then sell them immediately and pay the long-term capital gains tax on it. She's not in a lower bracket, but at least she doesn't need to stay under any limit. It's a little over $10,000, but I can just sell enough to get it under that and stay beneath the IRA limit.

From what I've read at the IRS site and on the FAQs here, this should be fine. Anyone know if I'm missing anything, or if I have a better alternative?


Looks fine to me, and I can't think of an alternative that would prevent the AGI problem and keep the money in the (potential) family.

On that subject, a little early wedding present. Since it sounds like you're both making decent money, remember that you will be considered married for the entire tax year in which you marry. Sit down at the beginning of that year and figure out what you should do about your withholding for the entire year. That way you can avoid an unpleasant marriage penalty surprise when you file that year's return.

TMF ExRO
Phil Marti

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Author: fling Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42904 of 122643
Subject: Re: gifting stock to stay below Roth limit Date: 12/14/2000 12:48 PM
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Thanks! We'll definitely do that!

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