Do I have capital gains if I transfer my stock?

February 18, 2004

Subject:  capital gains questions
From:  Bob
Date:  Fri, 23 Jan 2004

Hi Michael!

  1. On transferring (re-registering) a stock to another party, who is responsible for capital gains, if any?

  2. If one is transferring the stock to satisfy a debt, what are the tax ramifications?

Thanks much,
Bob

Answer

Date:  Mon, 02 Feb 2004

Hello Bob,

  1. I'm not sure I understand this question. If you make a gift of stock, the person who receives the stock is responsible for reporting any gain or loss when it is later sold.

  2. If stock is transferred to satisfy a debt, it is deemed to be sold for the amount of the debt. The person who transferred the stock will report a capital gain or loss based on the amount of the debt as the sales price less the tax basis of the stock. The person who received the stock will have a tax basis in the stock equal to the amount of the debt.

Good luck!
Mike Gray

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