What is my basis in stock that was gifted to me?
The cost basis of stock you received as a gift (“gifted stock”) is determined by the giver’s original cost basis and the fair market value (FMV) of the stock at the time you received the gift. If the FMV when you received the gift was more the original cost basis, use the original cost basis when you sell.
How do you calculate capital gains on gifted shares?
Here is the tax calculation:
- Sale Date – 02/03/2021.
- Sale Value – INR 4,00,000 (400 * 1000)
- Purchase Date – 15/02/2020 (as per previous owner)
- Purchase Value – INR 1,00,000 (100 * 1000) (as per previous owner)
- LTCG – 4,00,000 – 1,00,000 = INR 3,00,000.
- Tax on LTCG u/s 112A = 10% * 2,00,000 = INR 20,000.
What’s the tax rate on a gifted stock?
In other words, if your donor bought the gifted stock over a year ago from the time you sell the stock, it can be considered a long-term gain – maximum of 15% tax rate. If you sell the shares for a loss, your cost basis Cost basis is the original amount paid for a security that has been adjusted for wash sales and corporate actions.
How to figure out cost basis of gift of stock?
Start with the amount the original owner paid for the shares and add dividends and brokerage commissions. My grandmother wants to give me some shares of stock she has owned for a number of years.
How much is XYZ stock worth as a gift?
So let’s say you purchased 100 shares of XYZ stock at $50 a share. Your cost basis is $5,000. Now the stock is $80 a share and you give it as a gift. The value of your gift for gift tax purposes is $8,000. In 2019, you can give up to $15,000 to an unlimited number of individuals each year without paying a gift tax or even reporting the gifts.
How is capital gain taxed on gift of stock?
If you sell the shares for a gain, use the donor’s cost basis and purchase date as your cost basis and purchase/acquisition date to characterize your realized capital gain. In other words, if your donor bought the gifted stock over a year ago from the time you sell the stock, it can be considered a long-term gain – maximum of 15% tax rate.
