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Author: JeanDavid Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Re: Best way to Gift money Date: 4/7/2008 11:39 AM
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I have about $10,000 in a mutual fund at American Century that I need to give to my mother (I won't get into the personal details).

I know that I can gift her that amount of money without incurring taxes but first I have to get it out of the mutual fund.


I do not know American Century funds, but you have probably already paid most of the taxes on the some of the capital gains, dividends, and interest distributed by the funds (or re-invested on your behalf). It may also be that the fund has distributed capital gains to you, and if so, you already had to pay the taxes on those, too.

So the only taxes you would owe would be on the capital gains that have not been distributed to you already. If you had all the stuff automatically reinvested, it may be difficult to establish your cost basis, but you will have to do that.

I hope that fund is not in an IRA, or more complications might have to be dealt with.

N.B.: I do not even play a tax attorney on The Motley Fool.
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