gifted mutual fund shares

[euchlid]

What is the name of your state (only U.S. law)? florida

Hello, I was gifted mutual fund shares that I cashed out for $31000. My parents cost basis was $25000. Do I get to not claim $12000 of this income due to the gifting rule, or do I pay cap gains on all of it?

Thank you.

[euchlid]

I apologize. My parents transferred the shares into my name without paying any tax on them.

[anteater]

The $12,000 pertains to gift tax reporting. It is not relevant to capital gains.

If there were any intervening dividend/interest reinvestments, they would increase the cost basis. Your capital gain is;

Sales proceeds minus cost basis.