Calculating Gains On Sale Of Gifted Stock

Added March 24, 2009 by Ilyce R. Glink

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Summary: An investor received stocks as a gift many years ago, and recently sold some off. The gains on the stock will need to be calculated from the day it was received as a gift. If there has been a gain on the stock, taxes will need to be paid on it.

Q: I have stock that was given to me as a gift about 20 to 25 years ago. This year I sold a small portion of this. How do I report it on my taxes? Should I try to find out what it was worth twenty years ago and then do a capital gains or loss? Any information about this would be helpful. If you can't give me an answer do you know where I can find one?

A: Contact the company. They will know the price on the date of purchase. And yes, you need to figure out if you've had a gain or loss in 20 years. If you have a gain, you will have to pay 20% if you're in the 28 percent bracket or above, or 10 percent if you're in a lower bracket.

Your tax preparer can help you further.

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