true cost basis on stock gift from years ago


F

fredgsanford

I received a couple hundred shares of stock several years ago and my old
man's cost basis at the time was $10.82. At the time of the transfer the
stock was @ $55.00....question: if I sell the stock today @ $75/share..is
MY tax liability estimated using the $10.82 or $55? My understanding is
that it is the lesser of the two but want a second opinion...Thanks.
 
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T

Thomas Healy

I received a couple hundred shares of stock several years ago and my old
man's cost basis at the time was $10.82. At the time of the transfer the
stock was @ $55.00....question: if I sell the stock today @ $75/share..is
MY tax liability estimated using the $10.82 or $55? My understanding is
that it is the lesser of the two but want a second opinion...Thanks.
You got it.
 
S

Shyster1040

Depends on how you received it.

If he gave it to you as a gift (while he was still alive) then you have a
carryover of his basis, so your gain would be figured using the $10.82
basis.

If you received the stock as a bequest in his will, then your basis would
be stepped up to FMV at the time of the transfer, which would be $55.
 
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P

Paul A Thomas

fredgsanford said:
I received a couple hundred shares of stock several years
ago and my old man's cost basis at the time was $10.82.
At the time of the transfer the stock was @ $55.00....
question: if I sell the stock today @ $75/share..is
MY tax liability estimated using the $10.82 or $55? My
understanding is that it is the lesser of the two but want
a second opinion...Thanks.


If the stock was gifted to you (your "old man" was still living at the
time), then his cost basis of $10.82 carries forward.

If you inherited it (your "old man was not living at the time), then you get
a step-up in basis to the value, or $55.
 

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