Gift and stock basis? ? ?


N

news

Here’s the scenario:

1. I received stock as a gift 25 years ago. It was then valued at $5,000.

2. The stock is now valued at $10,000.

3. I now give it to my grandchild as a graduation present.

4. What are the tax consequences?
 
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S

Stuart A. Bronstein

news said:
1. I received stock as a gift 25 years ago. It was then valued
at $5,000.

2. The stock is now valued at $10,000.

3. I now give it to my grandchild as a graduation present.

4. What are the tax consequences?
You say the stock was valued at $5,000 when you received it. Do
you know what the person who gave it to you paid for it?

There are no tax consequences until your grandchild goes to sell
the stock. If you can find out the basis of the stock when you
received it, that will be your grandchild's basis when he sells it.

If you don't know the basis when you got it, and can't find out,
your grandchild will likely end up paying tax on the entire sale
price when he eventually sells it.
 
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R

remove ps

news said:
Here’s the scenario:

1. I received stock as a gift 25 years ago. It was then valued at
$5,000.

2. The stock is now valued at $10,000.

3. I now give it to my grandchild as a graduation present.

4. What are the tax consequences?
If the person who gift you the gift paid less than $5000, then your
cost basis and the person you give it to has a cost basis of what the
original person paid for it. You can perhaps try the internet to look
up historical prices and stock splits.

If the person who gave you the gift paid more than $5000, then your
cost basis and the person you give it to has a cost basis of $5000.
This rule is to prevent the giver of the gift from passin on capital
losses to their kids.
 

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