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Simplest way to gift shares at Vanguard

Posted: Mon May 18, 2020 9:58 am
by bertilak
I want to gift shares from my Vanguard account to a child's Vanguard account and I want to get as close as possible, without going over, $15,000. I also want to do so in-kind so any cap gains on the sale of those shares goes on the child's tax. (The child will actually have NO tax due to his non-existent income.) The catch is, I think, that to transfer in-kind I need to specify the specific shares and if I am not careful and cut it too close this may go over $15,000.

Any clues on the best way to do this? Just aim low? Can I over-gift and then return the excess in cash?

Re: Simplest way to gift shares at Vanguard

Posted: Mon May 18, 2020 10:04 am
by retired@50
No idea, but following.

Regards,

Re: Simplest way to gift shares at Vanguard

Posted: Mon May 18, 2020 2:56 pm
by Skiandswim
For gift transfers between Vanguard account, I just called Vanguard and use the voice verification system to execute the order. You need to specify the number of shares (can't specify exact $ amount, so I aim below $15K limit) and specific lots (unless using average cost basis). Takes about 2 days for shares to appear in child's account.

Re: Simplest way to gift shares at Vanguard

Posted: Mon May 18, 2020 3:08 pm
by livesoft
I gifted shares in-kind to my son years ago. Vanguard made me fill out an 116-page document and get a signature guarantee and mail it back to them.

Here is a post about it: viewtopic.php?p=3039010#p3039010 Maybe things are different nowadays?

Re: Simplest way to gift shares at Vanguard

Posted: Mon May 18, 2020 3:27 pm
by Opalmanta
We gifted shares of a Vanguard fund (using spec id) to our niece last year and did have to fill out the form. Our gift of shares was more complex because fund shares we were gifting were of a closed fund (to new investors) and this was a new account for her. Eventually it all came out ok, but it took a few phone calls on my part and on the part of our (adult) niece, complicated by the fact that Vanguard citing privacy laws for our niece's account, would not give me information on when the account was created, etc.

Re: Simplest way to gift shares at Vanguard

Posted: Mon May 18, 2020 3:45 pm
by bertilak
I will be calling Vanguard to effect this transaction and, actually, a total of four nearly identical transactions, tomorrow. I'll report back here.

Re: Simplest way to gift shares at Vanguard

Posted: Mon May 18, 2020 3:49 pm
by bertilak
Skiandswim wrote: Mon May 18, 2020 2:56 pm For gift transfers between Vanguard account, I just called Vanguard and use the voice verification system to execute the order. You need to specify the number of shares (can't specify exact $ amount, so I aim below $15K limit) and specific lots (unless using average cost basis). Takes about 2 days for shares to appear in child's account.
I'm hoping and expecting my experience to be as straightforward.

I have a plan for reaching exactly $15K. Since I let dividends accumulate in my settlement fund I think if I just get close to $15K I can use some of that to "top off" the gifts.

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 10:02 am
by bertilak
bertilak wrote: Mon May 18, 2020 3:45 pm I will be calling Vanguard to effect this transaction and, actually, a total of four nearly identical transactions, tomorrow. I'll report back here.
OK, job done -- with help of a call to Vanguard.

I am unable to accomplish in-kind gifting via the web page, even to other Vanguard accounts for which I have "agent authority." I'm not sure if there are more reasons but I think it has to do with one or both or the following:
  1. Change in account registration. Gifting shares requires a change in account registration (name of owner) of those shares.
  2. I have less than full agent authority on at least some of the four accounts I am gifting to. Perhaps that is the reason for the above.
I can get full agent authority but that (I think) requires some fancy paperwork requiring notarization by all parties, some of whom are not local.

The agent I dealt with had to call on a higher authority to get an override on some activity. i think it was because of my limited agent authority.

All told, it took more time than I expected but the job got done.

One thing that I had (but no longer have) a concern with: Every gifting transaction had to be authorized as a "sell" transaction from my account. I was concerned that this "sell" would trigger an immediate taxable event in my account. When asking for me to say "yes" to submitting the transaction I at first said "no" because I wanted an in-kind transfer and not a sale. I was assured it really was an in-kind transfer and not a sale despite the terminology (which they were apparently required to use). It led to a bit of overnight anxiety. Happily, the next day (today) the records showed disappearance of shares from my account and their reappearance in the other accounts. There were no sell transactions recorded. There were also no buy transactions in the destination accounts.

EDIT: I forgot to mention how I dealt with the $15K target. I did NOT try to "hit the nail on the head." I aimed low to be safe and, after the dust settled, decided that that approx $29.5K (from 2 donors) was close enough. No more monkey business needed!

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 4:01 pm
by Eagle33
bertilak wrote: Wed May 20, 2020 10:02 am Happily, the next day (today) the records showed disappearance of shares from my account and their reappearance in the other accounts. There were no sell transactions recorded. There were also no buy transactions in the destination accounts.
No record of any kind documenting the gifted shares? VG must provide some sort of form documenting this change of share ownership, does it not?

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 4:07 pm
by bertilak
Eagle33 wrote: Wed May 20, 2020 4:01 pm
bertilak wrote: Wed May 20, 2020 10:02 am Happily, the next day (today) the records showed disappearance of shares from my account and their reappearance in the other accounts. There were no sell transactions recorded. There were also no buy transactions in the destination accounts.
No record of any kind documenting the gifted shares? VG must provide some sort of form documenting this change of share ownership, does it not?
Yes, I get transaction verification emails and it is also recorded on the web site. The beauty of the $15K limit is that it need not be declared on the tax return and no documentation is required.

I just checked. The emails only list number of shares, not dollar amount. Same thing for the PDFs available on the web page. One would need to look up the share price on the transaction date to calculate a dollar amount.

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 4:26 pm
by Eagle33
bertilak wrote: Wed May 20, 2020 4:07 pm
Eagle33 wrote: Wed May 20, 2020 4:01 pm
bertilak wrote: Wed May 20, 2020 10:02 am Happily, the next day (today) the records showed disappearance of shares from my account and their reappearance in the other accounts. There were no sell transactions recorded. There were also no buy transactions in the destination accounts.
No record of any kind documenting the gifted shares? VG must provide some sort of form documenting this change of share ownership, does it not?
Yes, I get transaction verification emails and it is also recorded on the web site. The beauty of the $15K limit is that it need not be declared on the tax return and no documentation is required.

I just checked. The emails only list number of shares, not dollar amount. Same thing for the PDFs available on the web page. One would need to look up the share price on the transaction date to calculate a dollar amount.
Look up the share price for transaction date and then annotate the PDF with both the transaction date share price & the gift amount (manually calculated). Then save PDF in your records.

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 4:37 pm
by bertilak
Eagle33 wrote: Wed May 20, 2020 4:26 pm Look up the share price for transaction date and then annotate the PDF with both the transaction date share price & the gift amount (manually calculated). Then save PDF in your records.
I have a spreadsheet for all my investments. It has a log for significant events. I made a note of it there. Actually, it already had a note. I added closing price info.

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 4:42 pm
by MrJedi
I regularly give cash donations to a non profit but I had considered instead giving shares instead since it seems I could divest some highly appreciated shares without incurring a large capital gain but the receiving non profit can sell without a capital gain tax. Do you know if the process is similar for that situation?

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 4:59 pm
by bertilak
MrJedi wrote: Wed May 20, 2020 4:42 pm I regularly give cash donations to a non profit but I had considered instead giving shares instead since it seems I could divest some highly appreciated shares without incurring a large capital gain but the receiving non profit can sell without a capital gain tax. Do you know if the process is similar for that situation?
Well, if they don't have a Vanguard account things may be different.

I believe gifting shares is a pretty common thing to do. Call Vanguard and I think they can get you through the process.

I did a search on the VG website for "charitable gifting" but got back "Search results are unavailable at this time. Please try again later."

Vanguard does have a "Philanthropic center" (https://personal.vanguard.com/web/c1/ch ... opy-center) but the part you probably want says "COMING 2020."

There is a FAQ.

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 5:05 pm
by cashheavy18
MrJedi wrote: Wed May 20, 2020 4:42 pm I regularly give cash donations to a non profit but I had considered instead giving shares instead since it seems I could divest some highly appreciated shares without incurring a large capital gain but the receiving non profit can sell without a capital gain tax. Do you know if the process is similar for that situation?
I don't have experience with Vanguard for your questions, but do regularly transfer/donate shares to non-profits. Contact your non-profit first that they are able to receive the shares. If yes, they will provide the brokerage they are using with account # & DTC #. You will need this information to go back to Vanguard to initiate the transfer.

Donating appreciated shares is a fantastic way to give to non-profits!

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 6:35 pm
by Housedoc
I gift shares annually to my sons. They have VG accounts also. In years past I would fill out Gift form and mail it in. Last year I believe the form changed so you could input a dollar amount. I entered $15,000 on the form and on the day the exchange was made it was within a few dollars of $15K. You have to fill out a form for each person. Call or email VG for the form. You can search and download it from the forms section of the website. Using my phone now so I can't provide a link. Sorry

Re: Simplest way to gift shares at Vanguard

Posted: Wed May 20, 2020 11:17 pm
by Dale_G
bertilak wrote: Wed May 20, 2020 4:37 pm
Eagle33 wrote: Wed May 20, 2020 4:26 pm Look up the share price for transaction date and then annotate the PDF with both the transaction date share price & the gift amount (manually calculated). Then save PDF in your records.
I have a spreadsheet for all my investments. It has a log for significant events. I made a note of it there. Actually, it already had a note. I added closing price info.
Go to the account from which you made the gifts. Click on cost basis, then click on "Gifted Shares". You should see the number of shares gifted, the cost basis and the proceeds for each transaction.

Dale

Re: Simplest way to gift shares at Vanguard

Posted: Thu May 21, 2020 5:44 am
by bertilak
Dale_G wrote: Wed May 20, 2020 11:17 pm Go to the account from which you made the gifts. Click on cost basis, then click on "Gifted Shares". You should see the number of shares gifted, the cost basis and the proceeds for each transaction.
Thanks! That includes dollar amounts and is a handy summary, if ever I need it. I stuffed the pdfs in my 2020 tax folder.

Re: Simplest way to gift shares at Vanguard

Posted: Thu May 21, 2020 9:53 am
by nptit
Out of curiosity of how this works. Is the childs account a UTMA account that the gift is going to?

Re: Simplest way to gift shares at Vanguard

Posted: Thu May 21, 2020 10:15 am
by bertilak
nptit wrote: Thu May 21, 2020 9:53 am Out of curiosity of how this works. Is the childs account a UTMA account that the gift is going to?
Grandkids are UTMA. Others are not.

Re: Simplest way to gift shares at Vanguard

Posted: Thu May 21, 2020 4:06 pm
by BigJohn
MrJedi wrote: Wed May 20, 2020 4:42 pm I regularly give cash donations to a non profit but I had considered instead giving shares instead since it seems I could divest some highly appreciated shares without incurring a large capital gain but the receiving non profit can sell without a capital gain tax. Do you know if the process is similar for that situation?
I do this routinely and it’s very easy. Until this year you had to submit a paper form via snail mail. Now VG has an online form which you sign electronically. You need the name of the charity, their bank’s name and DTC number and the account number. I submitted the electronic approval on Sunday evening and the shares were in the charity’s account in Tuesday.

Re: Simplest way to gift shares at Vanguard

Posted: Thu May 21, 2020 5:43 pm
by Retired 2017
I have done the charitable thing each year for the past 15 years. I have done this with US Bank as well as TDA. No problem once the paperwork is done. The paperwork is a form from from TDA and a form from the charity along with a letter of intent so everyone understands . The stock gets transferred and then cashed out by the Charity where our charitable account is. It is the average value (high and low) on the day of transfer that is the calculation for the value of the charitable contribution.

On the gifting of shares to whoever we want (usually my kids and soon to be the grandkids) we used to call the broker where we had UGTM and say do it and it got done. . I intend to fill out whatever paperwork is necessary to get the job done but I continue to find TDA (where we have some of our money and kids accounts) to be very helpful for things such as this. VG is not as helpful. We do the closest to without going over transfer technique.

Re: Simplest way to gift shares at Vanguard

Posted: Thu May 21, 2020 9:39 pm
by drzzzzz
Having gifted accumulated shares for the past few years from Vanguard to charities, the process is almost different each time and best handled by using someone at Vanguard to walk you through it. In some past years we needed to fill out specific forms from Vanguard (get them signed by the receiving institution and mail them back to Vanguard), other years we could do it on the phone with Vanguard - as someone else has mentioned it often seems quicker if the charity already has a Vanguard account and number since you are transferring inkind shares which the charity usually then sells and does what it wants with.