Gifting appreciated stock

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date Gifting appreciated stock joetaxpayer 11-17-2006  Re: Gifting appreciated stock Rich Carreiro 11-17-2006
Posted by joetaxpayer on November 17, 2006, 2:27 pm I understand that when gifting appreciated stock, there must be a long term gain to take the current value as a charitable deduction (otherwise if short term, the deduction is limited to cost, in which case one comes out ahead selling the stock and donating cash.) Is there any such restriction on gifting to an individual? Client owns a stock which has more than doubled since its purchase and it will be LBO'd (purchased by a private company in a leveraged buy out) shortly. He'd like to gift some shares to his mother, who is in a low bracket, and can use the money. I googled and found no such restriction. Hard to find what hopefully doesn't exist. JOE Posted by Rich Carreiro on November 17, 2006, 3:41 pm > I understand that when gifting appreciated stock, there must be a long > term gain to take the current value as a charitable deduction > (otherwise if short term, the deduction is limited to cost, in which > case one comes out ahead selling the stock and donating cash.) > > Is there any such restriction on gifting to an individual? No. The rule for gifts to individual is relatively simple: * If the asset is held at a paper gain when it is gifted, the recipient takes on the giver's basis and holding period. * If the asset is held at a paper loss when it is giften, the receipient takes on a dual basis. To wit, if the asset is sold for less than FMV on day of gift, basis is FMV on day of gift. If asset is sold for more than giver's basis, basis is giver's basis. If asset is sold in between those numbers, basis is sales proceeds. I believe holding period tracks accordingly. See IRS Pub 550. -- Rich Carreiro rlcarr@animato.arlington.ma.us Similar Threads Posted Another gifting question December 14, 2006, 9:14 am Where to get stock volatility? September 29, 2006, 11:51 am AT&T Wireless AWE stock is it of any value October 2, 2006, 5:03 am Value or Growth Stock December 29, 2006, 8:19 am Basis In Stock ??? March 25, 2007, 12:37 pm Re: Basis In Stock ??? March 28, 2007, 5:02 am Selling Stock April 26, 2008, 12:43 pm Re: Selling Stock May 5, 2008, 1:53 pm Stock Dilution July 30, 2008, 12:46 pm Stock Trading Evolution November 29, 2006, 11:22 am