harley
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Many years ago I took $5K that I was putting away for DDs college fund and bought some stocks with it. The account was in my name, since I figured I'd eventually sell it and just use the proceeds to pay tuition. I got real lucky during the go-go 90s, then lost a bunch during the tech bust. But it built back up since then, and even with the recent financial hiccup it's worth about $45K.
DD never did go to college. She's now a single mom with a low paying job who is working hard and learning about life. We're not helping her much so she can do it herself, although she knows we're there if things really go to heck. But though she is getting by OK and has even saved a decent emergency fund, she doesn't have any money to spare to fund an IRA or 401(k).
What I would like to do is gift her some of the stocks, then have her move them into a Roth IRA. It seems like a good time to do it, since the prices are down so I can give more shares for the same amount of money. I would like to give her $8K worth so she can put some in the Roth this year, and the rest in the Roth Jan. 2. I've found a fair amount of info regarding her basis for the stocks I gift to her. However, I haven't seen anything about how to figure the amount when I gift it. Is the value based on the stock price at close of day of the day I do the transfer? Or is there some other way it's determined? Also, can she move the stock directly into a Roth (within the $4K contribution limit of course)? Or do I have to sell it, pay the capital gains tax, gift her the money, and then have her put it in the Roth? I would appreciate any help y'all can give on this one.
DD never did go to college. She's now a single mom with a low paying job who is working hard and learning about life. We're not helping her much so she can do it herself, although she knows we're there if things really go to heck. But though she is getting by OK and has even saved a decent emergency fund, she doesn't have any money to spare to fund an IRA or 401(k).
What I would like to do is gift her some of the stocks, then have her move them into a Roth IRA. It seems like a good time to do it, since the prices are down so I can give more shares for the same amount of money. I would like to give her $8K worth so she can put some in the Roth this year, and the rest in the Roth Jan. 2. I've found a fair amount of info regarding her basis for the stocks I gift to her. However, I haven't seen anything about how to figure the amount when I gift it. Is the value based on the stock price at close of day of the day I do the transfer? Or is there some other way it's determined? Also, can she move the stock directly into a Roth (within the $4K contribution limit of course)? Or do I have to sell it, pay the capital gains tax, gift her the money, and then have her put it in the Roth? I would appreciate any help y'all can give on this one.