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

For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.


Home    Newsletter Archive    Introducing Michael Gray, CPA    Articles    Tax FAQ   Need Help?    Other Links


Michael Gray, CPA
2482 Wooding Ct.
San Jose, CA 95128
(408) 918-3162
FAX: (408) 938-0610
Hours: 8am - 5pm PDT Monday - Friday


Connect on LinkedIn
Our Blog

Subscribe to Michael Gray, CPA's
Tax & Business Insight


We respect your email privacy