If I sell the stock and gift the proceeds value of $9,000, will this meet federal guidelines of gift up to $12,000 yr, i.e. I will not have to pay any taxes on the stock proceeds? If I gift the stock certs and daughter sells stock, does she pay taxes on proceeds? I am retired age 64 and daughter is 32 and self-employed.
2007-04-17 04:51:00 · 2 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
If you cash out the stocks, you will pay CG tax on the gain. Since it is less than $12,000 there will be no Gift Tax.
If you give her the shares, she gets your cost basis and will pay the CG tax when she sells them. Again, there will not be any Gift Tax consequences.
If your marginal tax bracket is 15%, your CG tax rate will only be 5%. Hers is probably higher than that so her CG tax rate will probably be 15% so there will be more $$$ in her pocket if you pay the CG tax and give her the balance.
2007-04-17 05:11:08 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
The $12,000 a year limit just means you don't have to pay an additional gift tax on the gift, or file a gift tax report - it does NOT mean that much of your income is tax-free. You'd still pay capital gains tax on the sale.
If you gift the stock to your daughter and she sells it, she'd pay the tax - if you sell it you'll pay the tax. Check on who would pay the least tax when deciding which way to go.
2007-04-17 05:16:40 · answer #2 · answered by Judy 7 · 0⤊ 0⤋