You can attach limitations to this through use of trusts, but simply gifting a stock portfolio or even individual investment from your financial institution to their account will not place limitations on how they use the funds. That means ceding control of the gifted stock to the recipient, who, in most cases, can then do most anything they want with the stocks you give. Third, you should consider financial control. As noted above, for most individuals, this won’t pose a problem so long as the annual amount of gifted stock falls below $16,000 per person (or $32,000 per married couple filing jointly). Second, you’ll need to navigate gift tax rules. Gifting stocks directly to someone, however, involves several issues you’ll need to have more knowledge about before making the transfer from your account to the beneficiary’s account.įirst, you’ll need to contemplate capital gains taxes, or those taxes you pay when you buy and sell stocks for a level of proceeds which differ from your cost basis. You don’t need to sell the stock before gifting shares of stock. Can You Gift Someone Shares of Stock Directly? Though, as with all stocks, past results are no guarantee of future performance. Likewise, you can use other types of trusts to donate appreciated stock that hopefully continues its past behavior and results in a positive future performance. You have several examples like Irrevocable Life Insurance Trusts (ILIT) where you can transfer wealth in a tax-smart way through a life insurance policy.īe mindful of rules like a three-year lookback period or the federal estate taxes ( $12.06 million of assets get exempted in 2022) that come into play. One way around this gift tax involves setting up a trust. Usually, gift taxes don’t crop up as an issue for most givers because they fall below the $16,000 annual limit per person per year (married couples who file taxes jointly can give up to $32,000 per year per child, grandchild or other loved one).įor example, grandparents with five grandkids can give up to $160,000 in gifted stock and cash (or other assets considered as the best investments to own) per year ($32,000 per grandchild) without needing to pay gift taxes.Ĭertainly a high bar to exceed and reason why gift taxes rarely become an issue for the vast majority of people looking to gift stock to someone. Because of this, you should factor these into the decision of whether you gift stock or how much you gift at a time. When it comes to giving stock, both you and the recipient may face capital gains taxes. Can You Gift Appreciated Stock to a 529 Plan?.What is the Lifetime Gift Tax Exclusion?.Can I Gift Shares to My Child or Family Member?.Stocking Stuffer Brokerages (and Year Round Gifts) for Adults.Great Stocking Stuffers (Custodial Brokerages) for Kids.How to Gift Stock for a Child in a Brokerage Account. ![]() → What is the Holding Period for Gifted Stock?.Does the Stock Gift Recipient Pay Taxes?. ![]() What are the Possible Tax Implications of Gifting Stock for You?.Do You Pay Taxes When Giving Stock as a Gift?. ![]()
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