Gifted stock

Forum|Forum|2 years ago
February 23, 2024
10 replies
92 views

This is likely too complicated a question to get a complete answer here, but if somebody can point me to a 'selling stock for dummies' or something sight. I appreciate it.

When we got married some 30 plus years ago. My dad gave us four thousand dollars and a t and t stock as a gift. It is spun off stuff left and right over the years. I believe some of the stocks that spun off have spun off themselves.

Recently we received spun off warner brothers stock and I decided to sell it. Turbotax was very nice and imported the info but it's asking me to review things. One question it asks is if I received the stock as a gift and if so , it starts o ask me all sorts of other questions about a cost basis that i'm not prepared to answer.

Would this Warner brothers spin off be considered a gift since it was a spin-off of another stock yhat spun off of the original at&t gift?

Maybe I need an accountant but I hate to do so considering the sale of the stock was a wopping "$200 and the 1099b indicates I had eighty seven dollar loss.

Thoughts?

TurboTax Home & Biz Windows

Bsch4477

Level 15

In view of the complicated history and small amount at issue I would just report a zero basis in the stock and be done with it.

DavidD66

Level 15

Do you know how your broker obtained a cost basis for your Warner Brothers shares? When stock is gifted to you, your cost basis is the same as the person that gave it to you. My wife had some AT&T stock that was given to her as a child by one of her grandparents. There had been so many spin offs and mergers that I determined I could never determine the cost basis. So I donated the stock, since you don't need to know the cost basis to take a deduction for the full current value. I bought new shares and my wife never knew.

I suggest you answer that you purchased the stock, use a cost basis of zero and use "various" as the acquisition date.

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

confusedrfAuthor

Level 6

What is the implication of putting zero as the basis?

As an fyi the 1099b shows a cross basis which I'm guessing is the value of the stock when it split? That vs what it sold it for seems to have resulted in a small.loss.

If I say it was not a gift It was a gift if I don't think it asked any further questions and just uses whatever was important on the form.

DawnC

Level 15

If you use a $0 cost basis, all the proceeds will be capital gain. You would pay the most tax if your cost basis is $0, so there would be no inquiries. If you claim anything else as the cost basis, you have the burden of proving if audited. Reporting $0 now will result in paying more tax but taking less risk than guessing an approximate basis and possibly receiving an inquiry.

The basis of securities you receive as a gift depends on whether your ultimate sale of the stock produces a profit or loss. If you sell for a profit, your basis is the same as the basis of the previous owner. In other words, the basis is transferred along with the property. If you sell for a loss, though, the basis is either the previous owner's basis or the value of the stock at the time of the gift, whichever is lower. In other words, you don't get to write off a loss that occurred while the donor owned the securities.

Tracking Stock Basis

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