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Lev
Lev, Tax Advisor
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can restricted stock once fully vested be immediately gifted

Resolved Question:

can restricted stock once fully vested be immediately gifted to another party through assignment
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.

Hi and welcome to Just Answer!
"fully vested" - means ownership is not restricted - and as the owner you may sell the asset, gift it, use as a collateral, etc - without any limitations.
I am not clear what do you mean under "through assignment" - but if the ownership is change - there might be a legal procedure to do that. For instance - if the stock is in your brokerage account and you want to transfer it to another person - that person might need to have a brokerage account as well.

 

Let me know if you need any help.

Customer: replied 2 years ago.
by assignment I mean can i without taking ownership instruct the company's counsel to put the vested shares into my daughter's name...on APRIL 1 I receive 10,000 shares that are restricted up to that day and would prefer not to take possession and pass those shares immediately to my daughter
Expert:  Lev replied 2 years ago.

"without taking ownership" - means - you do not own assets - if you do not own asset - you may not gift it.

Because taking an ownership also means taking certain tax liability - seems as "by assignment" you want to re-assign your tax liability to another person - that will not work.

 

If you "instruct the company's counsel to put the vested shares into my daughter's name" - that will be treated as your constructive receipt of income with corresponding tax liability - even if shares were never credited to your account.

Sorry if you expected a different answer.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22749
Experience: Taxes, Immigration, Labor Relations
Lev and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
so if I pay the tax liability can i not take possession of the shares but pass ownership to my daughter directly from the company?
Expert:  Lev replied 2 years ago.

Yes - you may do that - but still you will be considered as constructively received these shares - even you never take possession of the shares.

That in particular means - if the total gift value is above $13,000 - you would be required to file a gift tax return.

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