Ok ... let's break this down ... you got stock as a prize ... the prize winnings are taxable and reported on the tax return. This now becomes the basis of this stock. When you sell the stock you will only pay tax on the profit ... you do not pay taxes a second time on the prize winnings.
For instance you win $100 of stock ... you will report $100 of other income on the tax return in the year it was won ... this is taxed as ordinary income at your regular tax rate.
Then at sometime in the future you sell this stock say for $150 and you pay taxes on the $50 profit only. If you kept the stock for more than one year you get long term capital gains treatment otherwise it is taxed as ordinary income.
