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When your basis in the stock is higher than the current FMV and you give away your shares nobody ever gets to deduct that loss. Their basis for gain is what you paid for the stock, their basis for loss is the FMV at the time of the gift. If they sell it for a price between
your basis and the lower date of gift FMV there is no loss or gain to report.

Why don't you sell the stock and share with them the tax savings you get for taking the loss on your return?

Based on your response, that may be the best option. If I compute my taxes without counting the loss and then add in the loss. Whatever the difference is can go to my father and brother-in-law since that is essentially their money.

Also, correct me if I am wrong but isn't there a max loss you can deduct per year? For some reason I thought you could only deduct $3000 in losses per year. If the loss is more than that, do you just carry it over to the next year? How is that done?

Thanks for the quick response!

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