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Cost basis is key to understanding your tax obligations.
You can gift stocks to children through custodial accounts. ... You can safely gift stock under the annual gift exclusion, which allows individuals to give up to $17,000 annually (for 2023) or ...
Basis (or cost basis), as used in United States tax law, is the original cost of property, adjusted for factors such as depreciation. When a property is sold, the taxpayer pays/(saves) taxes on a capital gain /(loss) that equals the amount realized on the sale minus the sold property's basis.
Tax basis of property received by a U.S. person by gift is the donor's tax basis of the property. If the fair market value of the property exceeded this tax basis and the donor paid gift tax, the tax basis is increased by the gift tax. This adjustment applies only if the recipient sells the property at a gain. [7]
The stock had a basis in the husband's hands of 15 cents a share, but a fair market value of $10 a share when transferred to her. The Commissioner contended that the taxpayer's basis in the shares was the same as her husband's--15 cents—because the shares had been received by her as a "gift," as used in Sec. 113(a) (2) of the Revenue Act of 1936.
A stock split increases the number of shares you own, but it lowers the cost basis per share. So, if a company performs a 2-for-1 stock split, you’ll end up with twice as many shares, each with ...
For stocks or bonds, the cost basis is To figure out whether you need to report a gain -- or can claim a loss -- after you sell, you must start with the cost basis for that investment. Your Taxes ...
Generally, a taxpayer's basis in property is the cost to acquire the property. [2] However, there is an exception for inter vivos gifts and transfers in trust. [ 1 ] For gifts, to calculate a gain, the donee has the same basis in the property as the donor's adjusted basis in the property. [ 3 ]