My husband received the stocks as a gift when he was a child. I don't know how to calculate the captial gains and determine how much we should put aside for taxes. We got about $4,500 from the sale. Even a rough idea would be great!
2007-08-06 09:25:01 · 8 answers · asked by meltee 3 in Business & Finance ➔ Taxes ➔ United States
maximum long-term capital gains would be 15%, or $675 in your case. If you are in the 10 or 15% bracket, your capital gains tax would be 5% or $225. Don't know about state amount though, since I don't know what state you live in. The capital gains in this case would be taking the sale of $,500 and subtracting the cost basis of the stock from the person who gave your husband it as a gift. Ask them if they remember what their basis was, if not, best estimate would be to use the stock value the day the gift was given to your husband. The only change from that would be if your husband received it as a result of someone dying. Then it is inherited stock, and the value of the stock would be the value on the day of the person's death. I have heard that yahoo and also motley fool are both good for looking up historical prices of a stock.
2007-08-06 09:29:35 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Most of the other answers are correct - to minimize taxes on the sale, you'd have to know what the donor's basis was if it was a gift. If there are any records anywhere of when they bought the stock, it's possible to find that number. And if you know about when it was purchased but not the exact date, you could take the lowest price it hit during that period.
If the stock was inherited rather than a gift, the basis is the value of the stock on the date of death of the person he inherited it from.
To calculate your gain (what you pay tax on) you subtract the basis from what you got when you sold the stock. If you absolutely can't find a basis for it, just use zero - then you'll pay tax on the sale proceeds.
For federal, you'll pay either 5% or 15%, depending on your total income. Depending on where you live, you might also owe state income tax on it - that can range from zero to almost 10%.
2007-08-06 10:44:17 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Your husband will need to approximate when he inherited the stock.
If you can narrow it down to the day, use the closing price of that day. If you know the month, use the average price of the stock for that month. If you only know the year, use the average price of that year.
Assuming he has held the stocks for more than 12 months, he will report the sale as a long term gain, (assuming the price went up since then). Long term gains are taxed at 15% - meaning, you will 15% of the gain in taxes.
For example, if he inherited the stock when it cost $10, and sold it at $30, he has a long term gain of $20. He will owe 15% of the $20, which is $3.
Hope that helps!
2007-08-06 09:37:49 · answer #3 · answered by chipmorg 1 · 1⤊ 0⤋
You'll need to know the donor's basis in the stock to determine the gain. To figure that out, you'd need to ask the donor what their basis was or find out when they purchased the stock and you could possibly then figure out what they paid for it.
The tax is levied on the gain, i.e. the difference between the donor's basis in the stock and the net proceeds from the sale.
Lacking information on the donor's basis you'll have to use a basis of $0 and pay CG tax on the entire proceeds.
As this is obviously a long-term CG, the rate is normally 15%. If your marginal rate is already 15%, the rate drops to 5%. That's Federal only. If your state taxes CG they'll take their cut as well.
2007-08-06 09:32:39 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 0⤋
The basis would be the basis from the person who bought the stock. Given it's length you can assume the basis is almost nothing. Then it's long term capital gains which is 15% right now, so $675 for Federal, don't know about state.
2007-08-06 09:30:06 · answer #5 · answered by feanor 7 · 0⤊ 0⤋
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2016-10-01 12:54:35 · answer #6 · answered by ? 4 · 0⤊ 0⤋
For that amount of money (and that's about the minimun amount that I would recommend this), just hire a CPA. He/she should only charge you much less than $100 for simply answering the question, and around $100 for filling out all the proper forms for you. (Any more than that -- shop around for another CPA).
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2007-08-06 09:31:06 · answer #7 · answered by tlbs101 7 · 0⤊ 2⤋
At least 20% or $900.
2007-08-06 09:29:40 · answer #8 · answered by Anonymous · 0⤊ 5⤋