Here are the answers to your questions:
- Yes, depending on the amount there could be gift tax.
- Yes, that is correct due to the 'gift splitting' rules.
- Yes, the child will receive the cost basis of the giver (any reinvested dividends after the gift would add to the cost basis of the child.
- Yes, the income will be taxed on the child's return unless there are only interest and dividends below $2,600.
- IRS Topic 553
- It is a calendar year for gift tax, the amount for 2025, is $19,000.
- Gift Tax FAQs
- The best resource for this question is your legal council. We cannot answer this for you.
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