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[[I gave my children csco which I had held for about 2 years.]]

Good for you...

[[ If I pay the capital
gains on this stock from the time i bought it until the day I transferred it to their
accouts, is their cost basis that of the day of transfer or does it revert to when I
purchased the stock?]]

You don't have that choice. Once you gave the stock to them, you lost all control. You don't have the option to consider it "sold" at the date of the transfer. A gift is a gift. So their basis and holding period will be your original basis and holding period.

You can read more about this issue in the Taxes FAQ area. Check it out.

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