Gift Taxes

[MalikHenry]

If I gift stocks will the stock be valued at the cost basis or market value so I can make sure I stay under the gift tax exclusion?

[tagteam]

If you need to file a Form 709 (gift tax return), you will report the fair market value on the date of the gift.

[Critter-3]

https://www.schwab.com/learn/story/how-do-you-value-gift-stock-it-depends-on-whether-youre-giver-or-...

[tagteam]

The donee, however, will take your basis in the stock (i.e., a carryover basis).

[JoeD_CPA_CFP]

Hello,

Thanks for the question. When gifting stocks there are different issues to consider for the donor and recipient depending on who receives the stock gift. Stocks can be gifted to children, other relatives, charitable organizations, or anyone else you want to receive them. When you give the gift of stock, the recipient gets the cost basis and holding period of the stock you gave. 

The value of a gift of stock for liability regarding gift tax is not considered the cost basis of the donor. Instead, the value regarding a gift of stock in light of the issue of liability for gift tax is considered the market value of the stock when the gift is provided to the recipient. When you donate stock to charity, you’ll generally take a tax deduction for the full fair market value. The current annual gift tax exclusion for 2022 is $16,000 per person to as many people as you choose.

Here is a link to the IRS regarding Gift Tax for more information.

If you are interested in knowing how to determine the cost basis of a stock given as a gift, click here.