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First, whatever else has happened, how it should have been done, etc. is water under the bridge.

However, currently, your sister wants to sell her shares. While it is proper for you to accommodate this, it should not cost you anything nor take extra effort on your part. Taking the tax hit for selling the shares is, I feel, extra effort. There is a good chance it could lead to difficulties in your relationship with your sister. And the IRS might consider it questionable. And depending on your gain on the stock and your current income, the sale could increase your taxes more than 5%: do you have state income tax? Will any of your Sch. A deductions or child tax credits be lost? Then there's the wonderful AMT stuff.

So either your sister opens the joint account and sells her shares and pays the taxes, or your sister consents to pay her half (quarter, whatever you're willing to allow) of a lawyer and split it properly--the way it should have been done initially. It's clean, it's legal, you have no more financial ties to her.

Just (29 June, 2005) got out from under a similar situation. Be gracious but firm with your sister. Ask a friend to listen to whatever complaining you need to do about her irresponsible behavior, etc. This is not your fault!

Good luck!
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