Question:

Best way to transfer stocks between brothers.?

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10 year ago my brother open an account under his name with scottrade . At that time, I have some money and I gave it to him to buy me some stocks under his account. The stock s had been sitting in his account for a long time.

3 years ago; I opened my own account with scottrade.

Now ; I want to transfer my stock under his account to my account .

A scottrade employee gave a form that my brother has to sign to agree on the transfer.

what are the tax implication on that?

I don't want my brother to be punish (taxwise) for the transfer.

in the future; when I want to sell the those stock:

Will my taxes be calculated from the time the my brother bought the stock for me, or wil it be calculated from the time of the transfer. what other tax implication should I be aware of.

will my brother pay taxes at the time of the transfer?

how long I have to wait before I able to sell it ?

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  1. As far as tax is concerned, you and your brother are two different people and the tax man is not interested whether your brother bought the stocks on your behalf.

    The way it works is as follows:

    Your brother has to pay tax on the capital gains he's made from the time he bought them, to the time he transferred them to you. If he lost money, then he gets credit for cap losses.

    When you sell your stocks you will have to pay tax on gains you've made from the day you had the shares transferred, to the day you sold. You can sell your shares any time you like.

    If you are not interested in holding the shares, then the simplest and fairest thing is to ask your brother to sell the shares (not transfer them to you at all), and you can have the money from the sale, minus any taxes he may have to pay because of them.

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