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From the desk ofPeter S. Muffoletto, C.P.A.______Tax Implications of Gifted Stock One of the great ways to transfer wealth to other family members, or anyone for that matter is to gift appreciated stock, or stock that has the potential of appreciating. Gifted stock is the transfer of stock from one person or entity to another. Gifting shares of stock that has the potential to grow significantly in value is a great estate planning tool setting children or other family members to gain the...

How to fill out gifted stock

How to fill out gifted stock

1. Determine the value of the gifted stock on the date of transfer.
2. Fill out a gift tax return (IRS Form 709) if the gift exceeds the annual exclusion limit.
3. Complete the necessary documentation of the stock transfer, such as a stock power or a letter of instruction.
4. Provide the recipient with the original stock certificate (if applicable) and copies of all related documents.
5. Keep records of the transaction for your financial and tax records.

Who needs gifted stock?

1. Individuals looking to transfer wealth to family members or friends.
2. Parents wanting to give their children assets to invest.
3. Individuals seeking to minimize their estate taxes through charitable giving.
4. Workers wanting to reward employees or colleagues with stock bonuses.

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What is gifted stock?

Gifted stock refers to shares of stock that are given from one person to another without the expectation of receiving anything in return. It is a form of transferring ownership of shares without a financial transaction.

Who is required to file gifted stock?

Individuals who give stock gifts valued above the annual gift tax exclusion limit (currently $17,000 for 2023) are required to file a gift tax return (Form 709) to report the gift.

How to fill out gifted stock?

To fill out gifted stock for tax purposes, you need to complete Form 709. Include details such as the recipient's information, a description of the stock, its fair market value at the time of the gift, and any applicable deductions or exclusions.

What is the purpose of gifted stock?

The purpose of gifted stock is to transfer ownership of shares to another individual as a gift, which may provide financial support, estate planning benefits, or facilitate wealth transfer among family members.

What information must be reported on gifted stock?

Information that must be reported on gifted stock includes the donor's details, recipient's information, a description of the stock, the fair market value at the time of the gift, and any exemptions or deductions that may apply.