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<<Also, I'm not sure about the part where you say "inherit his cost basis".... what little I HAVE read on this, it seems that the shares are transferred at market value... which would mean my cost basis would be much higher (good thing)... comments? >>

Bob's responses are right on the mark. This technique is called "income shifting"...and it takes place all of the time (at least with many of my clients).

But you can read more about gift tax issues, income shifting issues, and how you retain the same basis in appreciated stock when you receive the gift in the Taxes FAQ area. I also discuss all of these issues in MUCH more detail in my new book. You might want to check it out.

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