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URL:  https://boards.fool.com/does-he-have-to-pay-taxes-on-the-sale-of-this-17056660.aspx

Subject:  Re: Capital Gains on Gift? Date:  4/13/2002  1:03 PM
Author:  lorenzo2 Number:  60250 of 131229

Does he have to pay taxes on the sale of this stock since it was a gift, or not?

Well, someone has to pay tax on the gain! Your son is the stuckee. But it's not so bad:

- Even though he's a dependent, he gets a standard deduction of $2528 (his earned income + $250) - see the worksheet on p. 31 of the 1040 booklet.

- He does owe capital gains tax on that $13,297. But he not only took over your basis, he took over your holding period as well - so these are long term gains, taxed at just 10%. Just carefully follow the instructions on Schedule D.

So, yes, taxes are due, but not as much as you fear. Probably state taxes as well.

Lorenzo
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