Transfer of stock of deceased which has to go to 1 of 3 siblings' name, then to be distributed to the other 2. How does the effect my taxes versus my sibilings?

[sshuler001]

How does it work when Stock of deceased is being transferred to your name, but you have other siblings who should get a portion of this stock. What is the best way to handle?

[Hal_Al · Accepted solution]

You can basically ignore income taxes. The first sibling has an inheritance and inheritances are not taxable. When you give shares to the other siblings, they will have received gifts and gifts are not taxable.. The cost basis, in the stock, for all three is the stock price  (average between high and low) on the date of death of the decedent. When the eventual owner of the stock sells the stock, he will have a taxable capital gain (or deductible capital loss).

If you sell the stock, an give money to your siblings (instead of shares), then only you  will report the sale on your tax return.

If the value of the stock, going to each sibling, is worth more than $14,000*, then a gift tax return (not income tax) may be due. "Gift Tax" is somewhat of a misnomer.  Even though a gift tax return may be required, very few people ever actually pay federal gift tax. The purpose of the gift tax return is usually only to document a reduction in the allowable estate tax exemption. See https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/...

*$28,000 if you give the stock to your sibling and his spouse; $56,000 if the stock was owned jointly by you and your spouse.