stocks gifted and new basis?

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CedarWaxWing
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stocks gifted and new basis?

Post by CedarWaxWing » Fri Apr 20, 2018 7:50 pm

https://www.fool.com/knowledge-center/h ... mined.aspx

This link suggests something that does not sound correct to me:

An uncle pays $5 per share for stock.

Later after it goes up to fair market value of $10 he gifts it to his niece Sally.

Then its FMV goes up to $12 dollars.

Fool.com says her CG is then $2 dollars because her FMV when it was gifted was $10.

That would seem to imply that gifting a stock has the same benefit and inheriting it... i.e. gets a new basis.
I have never heard or read that before.

Since the uncle gave her the stock and pain no CGs on it at the new value (he did not sell it) Sally's CG is derived from the uncle's original basis.. .therefore her CG is $7 (12-5). Correct?

M

livesoft
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Re: stocks gifted and new basis?

Post by livesoft » Fri Apr 20, 2018 7:55 pm

You should send e-mail to the address noted in the article. Point them to IRS Publication 550.
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jebmke
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Re: stocks gifted and new basis?

Post by jebmke » Fri Apr 20, 2018 7:56 pm

I prefer to get tax information from IRS publications and the relevant code sections.
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Gill
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Re: stocks gifted and new basis?

Post by Gill » Fri Apr 20, 2018 8:06 pm

I wrote them and told them they should be ashamed of themselves for publishing such an article.
Gill

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Pajamas
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Re: stocks gifted and new basis?

Post by Pajamas » Fri Apr 20, 2018 8:14 pm

In all fairness, the website is fool.com. What would you expect? :beer

livesoft
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Re: stocks gifted and new basis?

Post by livesoft » Fri Apr 20, 2018 8:22 pm

@Gill, thanks! Will you please let us know if they respond? I guess somebody else can tell us if the article is ever modified.
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CedarWaxWing
Posts: 539
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Re: stocks gifted and new basis?

Post by CedarWaxWing » Sat Apr 21, 2018 5:17 pm

Gill wrote:
Fri Apr 20, 2018 8:06 pm
I wrote them and told them they should be ashamed of themselves for publishing such an article.
Gill
Thanks Gill.

I have a friend who subscribes to their publication and he has given me the impression that over all they are usually good.

I was a bit surprised, to say the least that anyone would put such a thing out ... unless I was truly missing something that was obvious to everyone else.

M

Gill
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Re: stocks gifted and new basis?

Post by Gill » Sat Apr 21, 2018 5:24 pm

I’ve emailed them twice. Still no response. I’ll post whatever I hear.
Gill

CedarWaxWing
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Re: stocks gifted and new basis?

Post by CedarWaxWing » Tue May 15, 2018 3:36 pm

Gill wrote:
Fri Apr 20, 2018 8:06 pm
I wrote them and told them they should be ashamed of themselves for publishing such an article.
Gill
1+

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