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So the question is if we or our son have to declare the actual gifting fact.

My thinking is that we do not have to.


Your son does not declare anything until the stock is sold.

Whether or not you need to report the gift depends on how the account from which it was transferred is titled.

http://wills.about.com/od/understandingestatetaxes/qt/What-I...

So what about the $20,000 to Betty? Will $6,000 of the $20,000 given to her be considered a taxable gift or not? This will depend on two factors - (1) how the account(s) where the money came from were titled, and (2) whether or not you agree to split the gifts with your spouse.

If the gifts to Betty came from a joint account titled in the names of you and your spouse, then since each of you can give Betty $14,000 the gifts won't be taxable. If on the other hand the gifts to Betty came from an account in your spouse's sole name, then you and your spouse will have to decide if you want to split the gift to Betty or not. If you agree to split Betty's gift, then the total $20,000 will qualify as an annual exclusion gift, but you and your spouse will need to report the split gift to the IRS using Form 709 as discussed above. If you do not agree to split Betty's gift with your spouse, then your spouse will need to report a $6,000 taxable gift to the IRS using Form 709.
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