Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Hi,

I understand that when you do stock gifting you transfer the cost basis of the stock to the donee (your family member who has lower tax bracket) to take the advantage of their lower tax bracket. Does this rule apply to all kind of stocks including company Incentive Stock Option's stock? I mean these ISO stocks are over two years from grant date and over 1 year from exercise date.

For example, if I execise the stock 2 year ago at $1 per share and the FMV on that date was $1 too. And I then transfer the stock to my brother last week and he sold the stock at $5 per share. Do I need to pay any tax?

Thanks.


Chy161
Print the post  

Announcements

Disclaimer:
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.
Advertisement