removeps-groups[at]yahoo.com wrote:
- quote -

I not jointly owned property, yes...

But, it should also be noted there's no requirement that even if it were
over the statutory limit that a tax has to be _paid_ -- the requirement
is a return must be filed and the excess counts against the eventual
marital exclusion...

--

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On Jan 31, 8:05*pm, kam...[at]panix.com (Arthur Kamlet) wrote:

- quote -

But only 12k from each of them, seperately, right?

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- quote -

From Pub 950;

Annual exclusion. A separate annual exclusion ap-
plies to each person to whom you make a gift. In 1998,
the gift tax annual exclusion became subject to
cost-of-living increases. The exclusion for 1998 through
2001 was $10,000 and for 2002 through 2005 the exclu-
sion was $11,000. For 2006 and 2007 the amount is
$12,000. Thus, in 2007, you generally can give up to
$12,000 each to any number of people in 2007 and none
of the gifts will be taxable.

You are correct.
JOE
www.blog.joetaxpayer.com

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

kamlet[at]panix.com (Arthur Kamlet) wrote:
- quote -

The original gift was made in 1998. I believe the annual exclusion
that year was $10,000.

Stu

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In article <e3ea7af7-94f7-4515-a25d-63900f20505f[at]h11g2000prf.googlegroups.com> ,
removeps-groups[at]yahoo.com <removeps-groups[at]yahoo.com> wrote:
- quote -


And if they are not married, they can give you 24K with no
tax consequences.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 31, 10:05*am, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:

- quote -

Sorry, need to clarify two things. If you parents had to pay a gift
tax, it is in the year that they made the gift. Say they gifted this
money in 1998 and were subject to the gift tax, then they would have
to pay the gift tax in 1998 (though perhaps form 709 and the gift tax
money could be filed on April 15 1999). They don't have to pay
anything now. My paragraph above suggests that they have to pay a
gift tax now; I should have wrote "then they would have had to pay a
gift tax when they gifted you the stock". Second, the limit of 12k
includes all gifts to you -- so if they give 275*22=6050 plus 6000
cash, then they have to pay tax on $50. If your parents are married,
then they can give 24k tax free.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 31, 9:42 am, "Paul Thomas, CPA" <paulthomascp...[at]bellsouth.netwrote:
- quote -

Actually, it might matter. If the parent's basis was greater than 22/
share then 22 is the OP's basis for a sale at 15.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 31, 5:19*am, "McCormick's" <ajm...[at]comcast.net> wrote:

- quote -

if 275*22 is greater than the amount they could gift to you tax free
in the year that they gave you the gift (amount this year is 12k - the
annual exclusion), then they have to pay a gift tax.

However, the cost basis of the shares is what they paid for it. I
think a step-up of basis only happens when they pass the shares to you
at death, as they will have paid the necessary inheritance taxes if
any, but I'm not sure of this.

- quote -

You have to track the dividends. Suppose you got net dividends of 1k
and reinvested that in year 2005. Then in the tax return for year
2005 you would have reported 1k as income and paid taxes on it.
However, you purchased more shares at say $10 on 12/31/2005. So you
have 285 shares from your parents at a cost basis of XYZ, 100 shares
purchased on 12/31/2005 cost basis 1k. Say you got dividends on
12/31/2006 1k and reinvested at $20 a share; so cost basis is 1k on
12/31/2006. If you sell the shares on 1/1/2007, then the 12/31/2006
batch is a short term gain or loss, and the 12/31/2005 batch is a long
term gain, and what your parents gave you is also a long term gain (in
my example).

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"McCormick's" <ajmsc5[at]comcast.net> wrote
- quote -



Which doesn't matter at all except for posterity.

What matters is your parents cost basis, as that is gifted to you with the
stocks.



So find out from them, what they had as basis in that stock.




- quote -





Except for any dividends reinvested that create a short term gain/loss, the
rest is long-term gain/loss.







--
Paul A. Thomas, CPA
Athens, Georgia

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McCormick's wrote:

- quote -

The missing data. The value at the time of the gift was important only
for your parents to not have to pay gift tax, or to track their gifting.
You take on their cost basis, what did THEY pay for these shares?

You have 97.5 more shares, what was the dollar total of those reinvested
dividends. You declared them (good) but you must add the dollar total to
the basis your parents paid. That sum is your cost. The $5977 as you
know is the sale price. Make sense?
JOE

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Hi

My parents gifted 285 shares of Company ABC in September 1998. I have held
on to this stock until August 2007.

The shares were worth 22 at the time of gift
The shares were sold at 15.625.

The dividends of the stock were reinvested so in the end I had 97.5 more
shares. These dividends were declared on my 1040 every year. I am not sure
if this is important?


22 x 285 = $6,270
15.625 x 285 = $4,453.

Add in reinvested dividends 285 + 97.5 = 382.5 shares x 15.625 = $5,977

Amount on 1099-B = $5,977

How do I report this on Schedule D. I will assume I enter on Part II.
Long-Term Capital Gains & Losses.

Thanks in advanced for your help

A

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >