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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
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Experience:  I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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My father and grandfather bought stock in PG&E for me when

Resolved Question:

My father and grandfather bought stock in PG&E for me when I was a baby in 1986. It was in my name and my father was the custodian. I sold a portion of the stock to help buy a house in 2009. My father was still listed as custodian and I had to get his signature to sell. At the same time I had the stock then put into my name.
Question: Is this considered a gift? What date did I receive the gift? What would the basis be?
Submitted: 4 years ago.
Category: Tax
Expert:  Jon Andrews replied 4 years ago.

Your basis will be whatever they paid for it in 1986. The gift was made in 1986. You will need to find out what the cost was at that time and whether you have had dividends reinvested or other transactions that would increase your basis.

 

jon

Customer: replied 4 years ago.
would reinvested dividends increase the basis and how is the best way to find that out?<br /><br />More info<br /><br />1/24/86  11 shares at $5 were purchased<br />2/4/86   50 shares at $5 were purchased<br /><br />nothing was done untill 10/28/09 when 187 shares valued at $7,759.16 were sold.<br />I did not sell the original 61 shares and still own them.
Expert:  Jon Andrews replied 4 years ago.

It appears that PG&E has had a stock split resulting in you receiving an additional 187 shares. The tax result is that your basis in 248 shares (original 61 plus new 187) is based on the cost of the original 61, i.e. $305.00. So for the 187 you sold, the basis would be $305 / 248 * 187 = $230. You have a long term capital gain of $7,759 - $305 = $7,454.

 

jon

Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
Jon Andrews and other Tax Specialists are ready to help you

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