Stock gifting
Is there a limit on how much you can gift? The stock was purchased approximately 25 years ago and has grown and split a couple of times. Where would the tax liability fall. How do you find the cost basis? Thank you, Terry.
Terry Says
This year (and the limit has increased almost every year) the annual gift tax exclusion is $17,000 ($34,000 per married couple). That means you could give up to $17,000 (or a married couple could give a total of $34,000) in annual exclusion gifts to any child, grandchild or other person.
And the total of your gifts doesn’t have any estate tax impact until your death. For 2023, the gift and estate tax exemption is $12.92 million ($25.84 million per married couple). And that’s over and above the annual gifts you might have made.
Once you give a gift, the tax on any gains from the date of the gift are the responsibility of the recipient, in the year the stock is sold. But if you have a large number of appreciated shares, consult your tax advisor before doing any gifting. If you don’t have the purchase cost of the shares, you can use historical charts to value their cost basis.
And one more thing, if you wait to distribute these shares until after your death, there (under current law) will be no tax liablity for the recipient. His or her cost basis will be the valuation on the date of your death.
