I am going to transfer $14,000 worth of securities from my account to my sons. I presume there is no gift or income tax involved, and that his basis will be what mine was. Is that correct?
I realize it is somewhat smaller gift because he will eventually have to pay tax on the existing unrealized gain, but that is besides the fact.
Yes, that's right.
If you have given him other gifts during the year, then technically you should file a gift tax return and incur (but not necessarily pay) gift taxes, however.
Right again.
That's only correct as to basis if the securities are held at a paper gain on the day of the gift. If the securities are held at a paper loss on the day of the gift it gets more complicated.
Troubled wrote: : I am going to transfer $14,000 worth of securities from my account to my sons. : I presume there is no gift or income tax involved, and that his basis will be what mine was. Is that correct?
: I realize it is somewhat smaller gift because he will eventually have to pay tax on the existing unrealized gain, but that is besides the fact.
: --
If you are maign the transfer directly form the one account to the other, it might be a good idea to get an acknowledment form your son(assumign he is not a baby) that he has rece\ieved it. then file it with your important papers to prove the transaction at some later date. Iwas told to do this last year when I transferred some cash directly into my kids'brokeridge accounts, so I pass the advice on to you.
Wendy Baker
Have something to add? Share your thoughts — no account required.
Ask the community — no account required