Good afternoon. You will report any gain on the sale of your stock on your Form 1040. Then, the gift should not generate any tax. Each donor can give $13,000 per year per person under the annual gift exclusion. In addition to that, each person has a $5,000,000 lifetime exemption....which means a person can give a cumulative amount of up to $5,000,000 in gifts without incurring gift tax....the donor must file a gift tax return (Form 709) to let the IRS know how much of the lifetime exemption is being used, but there will be no gift tax until cumulative gifts have exceeded the $5,000,000.
I hope this has given you information that has been helpful to you. I wish you the best of luck!
If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping others or taking a break.
If I have adequately answered your question, even though the answer might not have been the one for which you hoped, 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.
If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you. Please be aware that the information provided here is not legal advice. Rather it is simply general information. All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
The 1099R only reports the amount of the total proceeds. Your gain is the proceeds less your cost basis in those stocks. You have to figure that amount and the difference is your gain or loss. Then, you will need to file the Form 709 in the amount of the total gift to your son in excess of $13,000...the first $13,000 will qualify under the annual gift exclusion.
The Form 709 has nothing to do with the 1099R..the 1099R only relates to your personal income tax. The Form 709 only relates to the amount you give your son.
On Form 8949 and Schedule D, you show the total proceeds (as evidenced by the 1099R) and your basis, and the net is subject to capital gains tax.