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Author: Barracuda Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121146  
Subject: Gifts and Taxes Date: 7/10/1997 9:38 AM
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This novice investor has a couple of simple-minded stock-related tax questions that I hope someone can answer.

1. I recently got a solicitation from a charitable organization (one that I like and actually contribute to) in which it explained that if I made a contribution in the form of stock, I wouldn't owe taxes on any capital gain. Is this true? Let's take an example. Suppose I bought 100 shares of XYZ 2 years ago at $25 each, and today the price is $50. I would seem to have, at the moment, an unrealized capital gain of $2,500. If I gave all 100 shares to a legitimate charitable organization, I wouldn't pay any tax on this $2,500? And what, if anything, would I be able to deduct as a charitable contribution?

2. This one is even easier. Same deal on the stocks: bought 100 shares at $25 and the price has now risen to $50. Suppose I want to give my son a wedding gift of these 100 shares. For tax purposes, is this the same thing as selling the shares, and realizing a capital gain of $2,500 -- thereby owing capital gains tax on this amount? Or not? And what would my son's basis be -- $50 per share? [And how would he be required to document this: keep a copy of that day's Wall Street Journal?]

Any insights appreciated.

[BTW, Roy, I emailed you these questions directly before I found this message board. Sorry; this seems to be a much more efficient way to do this.]
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