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.
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.