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Personal Finance Topics / Tax Strategies
No. of Recommendations: 1
Is the following legal? It seems too easy.
If I have stock that has appreciated a lot, say $10 to $100/share, can I gift 180 shares ($18,000 worth) to my son. I pay no tax as I haven't sold the stock, and the cost basis for him is $100/share, so he can sell with no capital gains tax? Then he can gift me $18,000?
Aussi
No. of Recommendations: 1
If I have stock that has appreciated a lot, say $10 to $100/share, can I gift 180 shares ($18,000 worth) to my son. I pay no tax as I haven't sold the stock, and the cost basis for him is $100/share, so he can sell with no capital gains tax? Then he can gift me $18,000?
Aussi
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When you gift an asset to another party, you also gift your basis along with it.
In your example, you son's basis in the stock is $10. If you died and he inherited the stock then his basis would step up to $100, so that may be what you are thinking of.
No. of Recommendations: 1
BigHairyMike
Thanks. I thought it was too good to be true.
Aussi
No. of Recommendations: 1
I may be wrong, but I believe this is a bit of a loophole:
Say I were to give my son 30 1kg gold bars that I bought at $1500/oz to place in a safe deposit box and keep safe for me, with instructions that if I do not need the assets before I die they become his at my death; and at my death the bars are worth $3000/oz, then this, the value of gold on the day I died, becomes his cost basis when selling since I provided him no other documentation.
Smufty
No. of Recommendations: 0
the gold was never gifted, but falls under inheritance rules.
