The cost basis of stock you received as a gift ("gifted stock") is determined by the giver's original cost basis (what they paid for it) and the fair market value (FMV) of the stock at the time you received the gift. If it's not possible to determine what was paid for it or the date it was purchased, the FMV at the time you received the gift may be the best estimate to use as the basis.
- If the FMV when you received the gift was more than the original cost basis, use the original cost basis when you sell. This is the most commonly encountered situation.
- If the FMV when you received the gift was less than the original basis, and you later sold the stock for:
- More than the original basis: use the original basis.
- More than the FMV at the time of the gift but less than the original basis: your selling price becomes the cost basis. You won't report a gain or loss in this situation.
- Less than the FMV at the time of the gift: use the FMV at the time of the gift.
See this help article for more information from TurboTax on determining the basis of gifted stock.
See this help article for more information from TurboTax on determining the original purchase price. For example, view the historical section at Marketwatch or Nasdaq, or Yahoo Finance.
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