Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124982  
Subject: Re: Income shifting Date: 9/28/2000 7:00 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
My son is in his sophomore year of college and I need to sell some appreciated stock to pay for his next semester (last year he paid about 40% of the cost from his own savings but that is gone now). Since he is in the 15% tax bracket, can I give him the stock as a gift and then have him sell it and pay his college bills from the proceeds? As I understand, he would still owe capital gains taxes, but at 10% instead of 20% that I would owe. I also know that if the gift is for more than $10,000, I have to look out for gift taxes. Also, I read about a lower capital gains rate of 8% after Jan. 1. If I gave him the stock (which is more than 5 years old), could he sell it after Jan. 1 and only owe 8% capital gains tax?

Correct on all fronts. You've already been told about gift splitting and the possible effect on student aid.

With respect to the 8% rate, if the taxpayer is in the 15% bracket, the 8% rate applies for all sales after 12/31/2000 if the holding period exceeds 5 years. For all other taxpayers, the holding period must begin after 12/31/2000.

Phil Marti
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next


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.