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gift to my grandson

I and my wife want to gift $16000 each to my grandson for medical school costs If we give him stock we have owned for 30 years we can avoid high capital gains tax.

If he sells the stock for his tuition, what is his tax liability? Is ownership based on the date he receives it? or based on our date of purchase? 

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2 Best answer

Accepted Solutions
AR_CPA
Employee Tax Expert

gift to my grandson

Hello fkopilak, 

Hope you're all doing great! How exciting that your grandson is going to college and you are helping him out!! That's just awesome. 

So if you are giving him stock that is appreciated in value and he then sells it, your cost basis and holding period will be transferred to him.  If your grandson is in a lower tax bracket than you then he will owe less tax or maybe no tax (if it is long-term) as compared to if you sold it under your name and you are in a higher tax bracket. 

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View solution in original post

gift to my grandson

if the holding period will be transferred to him, and he sells it immediately, is it long term capital gains for him?

 

View solution in original post

2 Replies
AR_CPA
Employee Tax Expert

gift to my grandson

Hello fkopilak, 

Hope you're all doing great! How exciting that your grandson is going to college and you are helping him out!! That's just awesome. 

So if you are giving him stock that is appreciated in value and he then sells it, your cost basis and holding period will be transferred to him.  If your grandson is in a lower tax bracket than you then he will owe less tax or maybe no tax (if it is long-term) as compared to if you sold it under your name and you are in a higher tax bracket. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

gift to my grandson

if the holding period will be transferred to him, and he sells it immediately, is it long term capital gains for him?

 

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