Tax problem from gift of stock- 2005 1040 Shedule D

We need to pause here. Your first sentence says you father gave you some stock. The second sentence says you acted as your father's nominee in selling some of his stock and buying other. Which is it?

If that's all that happened, don't blame your father for the decision to sell or your failure to find out the consequence before you did it.

My money's on the IRS in this one, but let's look.

The date your father acquired the stock. Thoughtful givers of stock include a copy of the purchase confirmation when they give the stock, so the recipient will have this information if they sell the stock.

$100

It's clearly long-term. Gifts bring with them the donor's basis and holding period.

Either your father is hosing you or his accountant is hosing him.

Well, too bad for me. The IRS was wrong, too.

Try Publications 550 and 551.

-- Phil Marti Clarksburg, MD

Both answers you got are wrong. When you received the gift of stock, you assumed your father's holding period and cost basis. Therefore, when you sold the stock you owe LONG TERM capital gains tax on the difference between the $5100 sales price and the $100 original cost basis. This is all explained in IRS Pub. 550, Investment Income and Expense. Ira Smilovitz

We here will only confirm what IRS told you is the law.

You say you'll be meeting with an accountant about this? Just do not meet with your father's accountant. (grin)

ChEAr$$$$$, Harlan Lunsford, EA n LA

your basis & date acquired = your father's basis & date acquired

You will probably discover that a gift of appreciated asset comes with the donor's tax basis in the asset. Thus, your basis in the gifted asset might be $100.... Gary Brolis

"Date Acquired" is 1980 (specifically, the date in 1980 when your dad bought it). Cost basis is $100.

Taxable gain to you is thus $5100-$100 = $5000.

Since holding period (which is measured from 1980) is more than one year, it is a long-term gain.

Wrong. You pay tax on the gain and it is a long-term gain.

Wrong. You pay tax on that gain too, but it is long-term, not short-term.

Also wrong. You pay tax on the entire $5000 gain, but it is all a long-term gain, not a short-term one.

See IRS Publication 551, "Basis of Assets" and Publication

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

thanks for al lthe responses, I quickly hired an accountant to make sure it was done according to Hoyle. Don

Don't pay him until he comes up with the same answers you are getting here. You couldn't hire better advice than what you got here. ed