Cost basis

Just transfered some stock from by parents to me---is basis calculated on original purchase or from date of transfer?

(transfer was not a result of estate or inheritance matters)

Thanks

 

Let me try again.....

My parents transfered stock to me. Current price is significantly lower than purchase price.....if I sell it...... is it income to me or a loss?
If income, what is my basis?
I'm assuming the transfer is counted as a gift...but how do I report it?

If there is a better forum for these questions I'll be happy move along.

Thanks

 

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Aw;
Call 2, or 5 local CPAs ,can give the most accurate answer. I think in TN, for example first $10,000[from parents/per year ] is tax free...................................... Nor does TN require a hunt liscense for landowners [on thier own land...]

 

You get carry over basis, i.e. your parent's cost basis at their time of original purchase.

If it was result of (God forbid) parent's death, then you get step up in basis at time of demise.

 

http://www.pennyborn.com/estatetaxes/giftsandgifting.html

"Share Your Cost Basis in Gifted Stock
When you gift stock, you should give the donee information regarding your purchase of the stock so they can retain it for their tax records. Provide the donee the following information: a. your cost basis; b. the date you purchased it; c. the value on the date of the gift; and d. your holding period. If you purchased the shares on multiple dates, provide the donee a record of all of dates of purchase, the number of shares purchased on each date, and your cost basis. To avoid giving the gift of a tax return nightmare, it is essential to provide the donee all information necessary for tax filings, including copies of trade confirmations or other supporting documentation.

Under current tax laws, the donee will owe tax on the difference between the donor’s cost basis and the value of the stock when the donee sells it, including reinvested dividends. Thus, the donee pays the capital gains tax for appreciation of the stock during the time it was owned by the donor and the donee. However, tax laws change frequently. Talk with a tax advisor to determine taxes that may be owed. See the IRS Website. "

 

neither if its under 13000. you fall under the irs gift limits. gifts under 13000 dont have to be reported.

 

i thought that too but it makes no sense. why would the government chip in for a gift to your child? if it was a cash gift its different because the government got its piece out of you already. call a cpa i am guessing right now haha