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10-16-2008, 10:31 PM
| | Junior Member | | Join Date: Oct 2008
Posts: 3
| | | Stock
My parents just sold shares of stock worth thousands that were in my name and now they want me to deposit the checks into my account and then write them a check down the road. I feel a little uncomfortable doing this as I have some concerns concerning tax liability and problems getting loans in the future. Does anyone have advice? |
10-16-2008, 11:36 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,487
| | Quote:
Originally Posted by michael_scott  My parents just sold shares of stock worth thousands that were in my name and now they want me to deposit the checks into my account and then write them a check down the road. I feel a little uncomfortable doing this as I have some concerns concerning tax liability and problems getting loans in the future. Does anyone have advice? | How old are you? How did the stocks get to be in your name? Yes you have capital gains liability if you sell the stocks for more than they were purchased for. You need to pay that. Further, if we're talking more than $12,000, you'll have to file a gift tax on the transfer to your parents. It doesn't make much difference whether you sign the checks over to them directly or deposit it in your bank account first. |
10-16-2008, 11:52 PM
| | Senior Member | | Join Date: May 2004
Posts: 33,549
| | Quote:
Originally Posted by michael_scott My parents just sold shares of stock worth thousands that were in my name and now they want me to deposit the checks into my account and then write them a check down the road. I feel a little uncomfortable doing this as I have some concerns concerning tax liability and problems getting loans in the future. Does anyone have advice? | If the stocks were in your name, then they were your property and you have no obligation to give your parents any of the money at all.
Even if somehow you have a moral obligation to give your parents the money, you certainly have no obligation to give them anything until you know the true tax liability and have paid that liability.
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10-17-2008, 12:21 PM
| | Junior Member | | Join Date: Oct 2008
Posts: 3
| | | I am in my 20s and it was to be for my college education. So regardless if I sign the check and my parents deposit it or I deposit the checks into my account and cut them a check, the process to claim the gains will be the same? |
10-17-2008, 01:22 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,487
| | | Tell us if you are over 21. It makes a difference as well as what state you are in. What is the value of the stock (and how much was it purchased for)?
If YOU sell the stock, YOU owe capital gains tax on it regardless of what you do with the money.
If YOU gift the stock itself back, you probably don't have any tax liability (and may not even need to report it depending on the value). They end up paying the capital gains.
You didn't indicate how this stock came to being in your name, but as others pointed out, the stock is yours and you're not obligated to give it (or the money from its sale) to anybody. |
10-17-2008, 02:06 PM
| | Junior Member | | Join Date: Oct 2008
Posts: 3
| | | I am in my upper 20s and the stock was put in my name as a teenager - my parents have access to it though as I think my father's name is also on it. Can he just deposit the checks seeing as how it is in his name too? |
10-17-2008, 03:56 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,487
| | | Depends on the wording of the certificates. If it only has him as custodian, the stocks are 100% yours now. | |
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