When it comes to giving stock, both you and the recipient may face capital gains taxes. Because of this, you should factor these into the decision of whether you gift stock or how much you gift at a time.
In short, yes. You don’t need to sell the stock before gifting shares of stock. Gifting stocks directly to someone, however, involves several issues you’ll need to have more knowledge about before making the transfer from your account to the beneficiary’s account.
- Gift Tax Rules: you’ll need to navigate gift tax rules. As noted above, for most individuals, this won’t pose a problem so long as the annual amount of gifted stock falls below $15,000 per person (or $30,000 per married couple filing jointly).
- Financial Control: That means ceding control of the gifted stock to the recipient, who, in most cases, can then do most anything they want with the stocks you give.
What are the Possible Tax Implications of Gifting Stock for You?
If the stock has appreciated in value and you choose to sell it to transfer cash instead of stock, you’ll likely encounter capital gains taxes. In this case, you’d be better off simply giving her the stock directly to avoid paying any taxes, trading fees or any other cost of ownership related to investing.