What are the tax consequences of a mother giving stocks to her son?

Question

The mother owns a block of stocks and would like to give as a gift to her son. Would there be any taxes due if no stocks are sold?

Answer 1

The capital gains taxes would count as the difference between what the mom paid for it and what the son sold it for.

But, if the stocks were given to the son as part of an inheritance (she died), then the stocks would get a "stepped-up basis" meaning the son would only pay capital gains tax on the difference between what he sold it for, and what they were worth when he received it.

Answer 2

Unless the value is enough to trigger a gift tax, there are no tax consequences for either mother or son until the stock is actually sold.  The son takes the mother's basis in the stock.

Answer 3

You can gift a family member up to a value of $12,000 without any tax consequences for either party.

Answer 4

This will be treated as gift. Read about gift and gift tax:

http://taxipay.blogspot.com/2008/03/us-g...

Answer 5

There would be no income taxes due if no stocks are sold.  

It is possible that gift tax would be owed.  However, this would occur only if the lifetime gifts of the mother exceeded $1 million.  If the value of the stock at the time of the gift is $12,000 or more, the mother files Form 709 with the IRS to record the gift (and pay gift tax if applicable).  

When the stock is sold, the basis of the stock follows the rules for basis of a gift.  It will depend on the donor's basis, the value at the time of the gift, the value at the time of the sale, whether there is a gain or loss, and gift tax paid.  In short, good records are needed.