Don't pay him until he comes up with the same answers you
are getting here. You couldn't hire better advice than what
you got here.

ed

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thanks for al lthe responses, I quickly hired an accountant
to make sure it was done according to Hoyle.

Don

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bbcrock[at]gmail.com writes:

- quote -

"Date Acquired" is 1980 (specifically, the date in 1980 when
your dad bought it).

Cost basis is $100.

Taxable gain to you is thus $5100-$100 = $5000.

Since holding period (which is measured from 1980) is
more than one year, it is a long-term gain.

- quote -

Wrong. You pay tax on the gain and it is a long-term gain.

- quote -

Wrong. You pay tax on that gain too, but it is long-term,
not short-term.

- quote -

Also wrong. You pay tax on the entire $5000 gain, but
it is all a long-term gain, not a short-term one.

See IRS Publication 551, "Basis of Assets" and Publication
550, "Investment Income and Expenses".

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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You will probably discover that a gift of appreciated asset
comes with the donor's tax basis in the asset. Thus, your
basis in the gifted asset might be $100....

Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php

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<bbcrock[at]gmail.com> wrote:

- quote -

your basis & date acquired = your father's basis & date
acquired

--
<<< Benjamin Yazersky CPA [NJ & NY] > > ---> real address on hobokenx or hobokeni <---

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bbcrock[at]gmail.com wrote:

- quote -

We here will only confirm what IRS told you is the law.

You say you'll be meeting with an accountant about this?
Just do not meet with your father's accountant. (grin)

ChEAr$$$$$,
Harlan Lunsford, EA n LA

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<bbcrock[at]gmail.com> wrote:

- quote -

Both answers you got are wrong. When you received the gift
of stock, you assumed your father's holding period and cost
basis. Therefore, when you sold the stock you owe LONG TERM
capital gains tax on the difference between the $5100 sales
price and the $100 original cost basis.

This is all explained in IRS Pub. 550, Investment Income and
Expense.

Ira Smilovitz

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<bbcrock[at]gmail.com> wrote:

- quote -

We need to pause here. Your first sentence says you father
gave you some stock. The second sentence says you acted as
your father's nominee in selling some of his stock and
buying other. Which is it?

- quote -

If that's all that happened, don't blame your father for the
decision to sell or your failure to find out the consequence
before you did it.

- quote -

My money's on the IRS in this one, but let's look.

- quote -

The date your father acquired the stock. Thoughtful givers
of stock include a copy of the purchase confirmation when
they give the stock, so the recipient will have this
information if they sell the stock.

- quote -

$100

- quote -

It's clearly long-term. Gifts bring with them the donor's
basis and holding period.

- quote -

Either your father is hosing you or his accountant is hosing
him.

- quote -

Well, too bad for me. The IRS was wrong, too.

- quote -

Try Publications 550 and 551.

--
Phil Marti
Clarksburg, MD

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This is US, tax year 2005. My father gifted me with stock
in 2005. As part of the transfer he said he needed to move
the money from one company to another. Previously, I'd only
worked with tax-defered Roth IRAs and the like so this
didn't trigger any reaction. He made the gift, I sold the
stock and bought the new stock and thanked him for the gift.

I did my taxes as I did them last year, but during the
"error checking" process I discovered the Capital Gains
issue regarding this sale. I spoke to the IRS, but what
they told me and what my father claimed are the tax rules
regarding the gift are totally different. I will meet with
an accountant tomorrow on this, but if anyone can give me
some advice that would be much appreciated:

Let's say it looks like this:
Stock bought in 1980 for $100
Stock gifted to me in 2005, value was $5000
Stock sold immediately after gift for $5100
In the Schedule D what is:
Date Acquired
Cost Basis
short term or long term capital gains status

My father claims his accountant claims that neither he nor I
pay capital gains on the amont from $100-5000 because it was
gifted, I only pay short term capital gains from $5000-$5100
or $100. I understand from the IRS that I owe Short Term
Capital Gains from $100-$5100 which are significant I don't
know how they get short term capital gains yet still
calculate the cost basis from 1980.

I read the instructions, but could not understand them enough to sign
my name to it.

thanks for any information, I appreciate it.

Don

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