The simple answer to your question is no, the value of a gift of stock for gift tax liability is NOT the donor’s cost basis, but rather the fair market value of the stock at the time the gift is given. So let’s say you purchased 100 shares of XYZ stock at $50 a share. Your cost basis is $5,000.

What does a cost basis of 0 mean?

Is entering 0 okay? Yes, if you are certain you didn’t pay anything for these shares, then you can enter “0” as the Cost Basis. Before doing this, check with your employer’s payroll department and make sure that the company did not include any “cost” for these shares in your taxable income (Box 1 of your Form W-2).

How to calculate gains and losses from gifted stock?

In this situation, your basis is your uncle’s adjusted basis at the time of the gift, and you may need to adjust for gift taxes if applicable. For example, let’s say your uncle bought the stock for $15 per share and it was worth $25 per share when he gifted it to you. If you then sell it for $25 per share, you will have a gain of $10 per share.

Do you have to pay tax on gifted stock?

When the stock is gifted to you, there is no income tax for you to pay, though you may owe tax on dividends and interest income received subsequently. The calculation for potential capital gains …

What’s the value of a stock as a gift?

Your cost basis is $5,000. Now the stock is $80 a share and you give it as a gift. The value of your gift for gift tax purposes is $8,000. In 2019, you can give up to $15,000 to an unlimited number of individuals each year without paying a gift tax or even reporting the gifts.

How to figure out the basis of a gift?

According to the IRS, to figure out the basis of property you receive as a gift, you must know three amounts: The adjusted cost basis to the donor just before the donor made the gift to you, the fair market value (FMV) at the time the donor made the gift and the amount of any gift tax paid on Form 709 if applicable.