Message Font: Serif | Sans-Serif
No. of Recommendations: 0
[[I have 2 nephews (6&10) that I opened brokerage accts for but have not yet funded. I would like
to know the tax ramifications for me if I transfer some stocks I now own to them. ]]

Without knowing more about the accounts, it's impossible to really provide any information. Are the accounts in your name, simply "earmarked" for the kids? Or are these UGMA/UTMA accounts? Or are they other custodian type accounts with you as the custodian? Whose social security number will the account be reported to? You? The kids?

I just need some additional information on this issue because it is the crux of the matter.

[[Specifically, I
have some short&long term capital gains this year that I need to offset with either selling some
lagging stocks that need time to recover (oil service) or transferring them to the youngsters accts.]]

A transfer would do you no good at all.

[[ Would transferring them give me the loss I need to offset my gains, or would it just give my
nephews the benefit when they recover and sell them? The stock current value would be approx
$2k each child, although I paid approx $4k.]]

In generally, you NEVER want to gift DEpreciated shares of stock. You are much better selling the stock, taking the loss, and then gifting the cash.

But you have a number of issues here that you need to do a bunch of additional reading. You can find posts regarding gifting of stocks, the basis rules, the gift tax rules, and the kiddie tax rules all in the Taxes FAQ area (some are in the "archives" section...some are "up front"). You really need to spend some time reading that information (since you need the backround in order to take this discussion further).

Then I would suggest that you visit the Fairmark tax site ( and read the discussion there about UGMA/UTMA accounts. That will give you some idea of what you might be getting into.

Finally, the gift of stock issues are discussed in detail in The Motley Fool Investment Tax Guide. You might also want to check that out since you are obviously new to taxes and investing.

TMF Taxes

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link ( to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on to go directly there.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.