Client wants to transfer appreciated securities to son, who will probably sell them. What is basis of gifted shares - original owners cost, or value as of date of gift.
tax basis for gifted securities
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Drip?
Don’t forget the cost basis includes the original cost of the stocks, plus any reinvested dividends whilst holding the shares. That could add up if held for some time. Also, it would be a good idea to research the stock for splits and mergers in the past.Circular 230 Disclosure:
Don't even think about using the information in this message!Comment
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Step Doctrine
If the shares are gifted and sold right away because there is a tax savings - IRS can use the Step Doctrine to say the gain goes to the gifting party. It would be interesting if the seller is in a higher tax situation, but then why was there a gift?Comment
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