Gifts of Stock
Menu Path: Income > Common Income > Investments and Savings (1099-INT/DIV/B/DA)
If you receive a gift of property, such as a home or stocks, your cost basis is typically the same as that of the person who gave you the gift. You will only recognize income when you sell the property. For example, if your grandfather gives you stock worth $10,000, which he purchased for $2,000 ten years ago, your basis in the stock will be his original cost basis of $2,000. If you immediately sell the stock for $10,000, you would report a long-term capital gain of $8,000 on your tax return.
You would report the sale of the stock on Schedule D of your tax return, just as if your grandfather had sold it. The rules for calculating the cost basis of stocks or other property can be complex, so consult a tax guide or the IRS website to help you determine the appropriate cost basis for gifted property.
You will enter the stock sale on the Stock or Investment Sale Information screen.
If you receive a gift of property, such as a home or stocks, your cost basis is typically the same as that of the person who gave you the gift. You will only recognize income when you sell the property. For example, if your grandfather gives you stock worth $10,000, which he purchased for $2,000 ten years ago, your basis in the stock will be his original cost basis of $2,000. If you immediately sell the stock for $10,000, you would report a long-term capital gain of $8,000 on your tax return.
You would report the sale of the stock on Schedule D of your tax return, just as if your grandfather had sold it. The rules for calculating the cost basis of stocks or other property can be complex, so consult a tax guide or the IRS website to help you determine the appropriate cost basis for gifted property.
You will enter the stock sale on the Stock or Investment Sale Information screen.
