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when giving children stocks, when do they have to pay property

gains taxes...
when giving children stocks, when do they have to pay property gains taxes
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8/26/2013
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,870
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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NPVAdvisor :

Hi,

NPVAdvisor :

They will not pay property gains taxes until (and unless) the sell them

NPVAdvisor :

The tax will be a capital gains tax, and if held for more than one year, will be taxed at the lower capital gains rates (as opposed to being taxed as ordinary income)

NPVAdvisor :

The new capital gains tax rates for 2013 and future years are as follows:



  • 0% applies to long-term gains and dividend income if a person is in the 10% and 15% tax brackets,

  • 15% applies to long-term gains and dividend income if a person is in the 25%, 28%, 33%, or 35% tax brackets, and

  • 20% applies to long-term gains and dividend income if a person is in the 39.6% tax bracket.

NPVAdvisor :

There is also a new 3.8% medicare tax on top of that (IF their incomes are above ...


NPVAdvisor :

Here's an excellent article on that: http://taxes.about.com/od/payroll/a/Medicare-Tax.htm

NPVAdvisor :

One lase thing; The capital gains tax is taxed on the gain (net sales price minus the tax basis in the assets) ... If you gift them the stocks, your basis will carry over to them ... if they are left to them at death, then the basis is stepped up to the fair market value as of date of death, so that if they are sold right away, there may be NO capital gains at all

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,870
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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hi Thelma,

I noticed that you rated my answer as just OK.

If there's anything else I can add or do to make you a more satisfied customer, please let me know.

And do so here, so they won't charge you for another question.

Thanks,
Lane
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Lane
Lane
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