14 Oct Who owes taxes on these gifted stocks?

Q. After almost 20 years, I have just transferred some stocks to a sibling. For all those years I paid taxes on the stock dividends, who gets to deduct those taxes for income tax purposes – the giver or the receiver of the stocks?
— Generous guy

A. If you’re looking for a new tax break, you’re out of luck.

As time passed, you paid tax on the dividends you received.

And now, for dividends going forward, the taxes would be paid by your sibling because your sibling now owns the stock, said Bill Connington of Connington Wealth Management in Fairfield.

“As for when stock is sold, taxes will be based on what your cost basis was when you gifted stock – the fair market value of the stock at time of the gift and how long they have held the stock since then,” he said.

You, as the gifter, would owe no further taxes, Connington said.

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This story was originally published Oct. 14, 2019

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