gift of stock taxability

[jcyouth10]

We were gifted stocks the have a cost basis of $60K for 2020.  We had no choice but to sell because the company was acquired.  I know $30K of the profit was considered a gift to my wife and I filing jointly.  I know I need to pay capital gains but my question is how much of the stock proceeds from the sale will be counted towards income for federal income tax if any?  (not capital gains)

[M-MTax · Accepted solution]

There is no gifting of 'profit' but only gifting of property....with gifts you get the giver's basis and holding period when you're figuring a gain and the lower of the FMV at the time of the gift or giver's basis when figuring a loss. If you know you have a gain you subtract the giver's basis from the sales price and that's your gain which would be a capital gain.

[jcyouth10]

Got it - Thanks

my question is of the $60K that is going to be taxed for property gains tax - will any of the gift count towards my federal income taxes?

I have already figured the gain of $60K because I know the Cost basis and sale price of the stock.

thanks so much for your help and answer!

[logtown]

Does the net proceeds from the sale of stock count as income? Not talking about capital gains?

[BrittanyS]

Yes.  Net proceeds from the sale of stock, mutual funds, or property are considered income.  Net proceeds from stock are the amounts the seller receives following the sale of an asset after all the expenses are deducted from the gross proceeds.  You can enter stock sales in TurboTax by following these instructions:

1. Click on Federal Taxes (Personal using Home and Business)
2. Click on Wages and Income (Personal Income using Home and Business)
3. Click on I'll choose what I work on (if shown)
4. Under Investment Income
5. On Stocks, Mutual Funds, Bonds, or Other, click the start or update button

For more on stocks, see the link below:

Stock Sales

@logtown