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Gifting stock to child
Old 05-22-2014, 04:20 PM   #1
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Gifting stock to child

Understand each parent can gift $14k of stock to each kid.

So 2 parents together can gift $28k to a child.

If one spouse works for Megacorp and has shares of Megacorp in an equity grant account, can they gift $28k to a child to cover both spouse's gift ?

Or can one only give $14k of stock to kid - since shares are in only one spouses name (I presume) ?

Or could spouse 1. transfer Megacorp shares from company equity account to a joint spousal account and then 2. transfer $28k to kid ($14 from each spouse) ?

Thanks for any thoughts.

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Old 05-22-2014, 04:50 PM   #2
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No need to bother with the double transfer. Just transfer $28,000 worth to the child from the one parent and have the spouse sign Form 709, the gift tax return consenting for it to be a split gift.

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Old 05-22-2014, 09:26 PM   #3
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Remember that for appreciated stock, the original basis is retained. E.g. if you bought the stock for $1000 and it's now worth $14,000 and you gift it to your child. If that child sells it for $14,000 they have a $13,000 capital gain.

The tax rate on that CG depends on, well, this:

Tax Topics - Topic 553 Tax on a Child's Investment Income

Which doesn't apply for gifted stock to other folks, but the OP mentions kids.

Depreciated stock gifts are a little different. Usually it's better to just sell the stock (retaining the gain) and gifting the cash since the new basis is the price at the time of the gift.

And finally, remember this is different from giving appreciated stock to a charity, but that's another issue.
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