Is the transfer of shares from one brokerage account to another third party account a taxable event?

Question

can the cost basis simply be carried over to the other third party account?

I would like to assume the stock position from another person, through share transfer. If the broker reports this "transfer" as a sale to the IRS, of course we need to comply. It would be quite complicated if this was the case as the transferree needs to pay tax on initial transfer and then we need to readjust the basis on my account. Steps I'm not familiar with. If broker does not report as sales then I will take the position as it is including the original cost basis. Any ideas?

Answer 1

No transferring your stock to another brokerage account is not a taxable transaction. The cost basis remains the same. You did not sell anything.

Answer 2

If the shares remain in your name with your social security number then there is no sale. if you transfer to someone else, then it is a sale and should be reported as such. If you still receive any dividends then stock is still yours, if someone else gets the dividend it is a sale.

I take it a third party is someone else

It could be a gift if you are just giving them to someone.

Answer 3

depends if there are any shareholder fees or dispursment buyouts...if you are making any money off these tranfers than yes most likely there are taxable but some of the brokerage fees take place of taxable income and thus take care of that...talk to your broker he'll know your individual status

Answer 4

I'm not a tax expert, but I believe as with transferring an IRA, as long as you don't take possession of the money there's no tax involved...contact the IRS to find out for sure...