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I'm trying to file a return for my son, and I'm stumped.

My (now ex-) husband and I gave our son approximately 10K each worth of stock in 2000 and 2001 as gifts towards his college expenses. The cost basis for all the shares was $3.06/share (purchased in 1997). The stock was sold in two lots in 2001, for $18.31 and $18.02 per share respectively, with a total gain on the sale of approximately $13297.

Does he have to pay taxes on the sale of this stock since it was a gift, or not? From what I can tell from the tax tables, it looks like he may owe over $2K - yikes!!

He also had earned income of $2278 (no fed. or state taxes were withheld) and was claimed as a dependent on my ex-'s return. If anyone can shed some light on this, I'd be grateful.
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