taxes on transfer of stock to children for gifting

Home Fairmark Forum Retirement Savings and Benefits taxes on transfer of stock to children for gifting

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  • #7248
    djbauer7
    Participant

    Parents want to gift stock they have to their kids names for gifting of the 15k per year.

    The parents would have to pay capital gains on the stock correct or since its under a gift they don’t?

    Can it be done with out any tax consequences to the parents?

    Thank you
    Douglas

    #7250
    Alan S.
    Participant

    Assuming the shares are valued at equal or more than the parent’s adjusted basis at the time of transfer, the children will use the parent’s basis for reporting the sale of any shares. There is no tax consequence to the parents including gift tax since the donation is within the annual exclusion amount.

    In other words, if the cost basis is low, the children might owe considerable LT cap gains. The holding period for the shares includes the time owned by parents.

    #7284
    Lewis-H
    Participant

    You can give each child up to $15,000 a year without being tax. … However, you should be aware that any amount that exceeds $15,000 a year will take from the total tax exemptions your estate will have after your death, assuming your worth will be anything even close to $11.18 million.

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