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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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My mother, a shareholder in a public company, did not want

Customer Question

My mother, a shareholder in a public company, did not want to sell her shares but her company is the subject of a tender offer which WILL go through such that she is being forced to sell at a capital loss. As she is an elderly person on a fixed income, she will never be able to make use of those losses. Is there any way to transfer those losses to her kids, or to put them in some kind of trust or corporate entity so they can be "used" by the trust or corporate entity?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.


Hi and welcome to Just Answer!


Your mother may gift shares to you - your basis will be either her cost basis or fair market value of shares at the time of gifting - whatever is less. If you will be forced to sell shares at a loss - that will be your capital loss.


Alternatively – shares may be transferred to the trust – but for the sale to be detached from your mother’s taxes – that should be irrevocable trust – so you need to consider overhead costs for maintaining the trust. Capital losses could be used to offset other gains or distributed to beneficiaries.