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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121566  
Subject: Re: how to split a joint account Date: 3/13/2014 8:26 AM
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Why am I determining the cost basis of the stock? Is that 14k of current value or of original cost basis? Don't see where that fits in. I wasn't thinking about 'stepped up cost basis' - I knew that didn't apply.


You need cost basis because that is the value of the stock that you are giving to your sister. She will have your cost basis and your holding period, and the current value of the stock does not come into play at all. When she sells the stock, she will use your cost basis to determine her gain or loss, and pay the tax accordingly.

So if the stock is worth $20k now, but you only paid $10k for it, your basis in it is $10k, and that is the value of the gift you are giving your sister.
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