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Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 53946
Experience:  29 years of experience as a tax, real estate, and business attorney.
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I would like to transfer stock shares that I have purchased

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I would like to transfer stock shares that I have purchased through my employers stock purchasing plan that is administered by Smith Barney to my children's custodial accounts that I have with Schwab. There isn't a restriction on the transfer of shares out of the SB account. I wanted to know what the income tax implications are, and if there is a more efficient way of doing this without liquidating the shares and transfering the proceeds to their accounts

Good morning. There should be no tax implications of this transfer depending on the value of the stock being transferred. You have an annual gift tax exclusion of $13,000 per child. In addition, you have a $1,000,000 lifetime gift exemption. So, as long as these transfers are under the gift tax amounts set forth above, you will have no gift tax consequences. Also, there will be no income tax consequences for this.

 

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 6 years ago.
Thank you for your reply. When the shares are transfered, what is the value that is used in the future for Capital Gains when the shares are liquidated? Is it the original purchase price, or the market value at the time of transfer?

You're welcome. When the shares are sold in the future...the capital gain will be the sale price less the basis (which is your purchase price since in the event of a gift, the basis is carried over from you to them).

 

I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

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