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Transfer stock to spouse, How is it taxed?

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Danimal67

Junior Member
What is the name of your state? California

Hello, I've searched for a while and cannot find specifics about this.

I have $15,000 in a stock that I want to transfer to my wife.

I paid $13,500 into it, so it's only gained $1,500.

If i sold it, i'd have to pay tax on that $1,500 right?

But what if i transfer it and SHE sells it?

Does she still get to only claim a $1,500 gain by showing my original purchase receipts for $13,500?.... or is the IRS going to want to tax her for $15,000 gain?

We will probably be filing seperately, 1st year married and just used to doing it that way.

Yes, i'm new to this, 1st stock i've owned and not sure how taxes work.
:eek:

Thanks,
Dan
 
Last edited:


abezon

Senior Member
If the stock is community property, she already owns 1/2 of it even though it's in your name. Why do you want to change title?
 

Danimal67

Junior Member
State = CA

I'm not clear on the law of 'community property'. If I had bought all the stock before we met and it's still in my same account, it's considered 'community property' now that we're married... even though the account wasn't set up like that?

Basically, we want to cash out, but I don't want the extra capital gain to fall on my taxes this year.

So I'm wondering if it's possible to give it to her and have her take the $1500 capital gains and pay tax on that, filing separately.

Again, i'm just not sure of the logistics of how they'd calculate what to take into account when she cashes out?

They would see her getting a $15,000 payout from the stock, but would she be able to show the $13,500 in cash receipts paid by me to indicate that it's indeed ONLY a $1500 gain?

Thanks for the reply, appreciate any help i can get.
Dan
 

abezon

Senior Member
If you gift her the stock, she takes it with your basis & holding period. However, is filing separately really what you want to do? It's usually worse than filing jointly. You pay tax at a higher rate & you lose lots of credits.
 

Danimal67

Junior Member
Hmmmm..... any idea how much filing jointly usually saves?

Also, I file 1099's, independent contractor. She files regular, is joint filing still an option?

thanks for the reply abezon....
 

Snipes5

Senior Member
It doesn't matter what your individual sources of income are, joint filing is still an option, and is probably the best option 99 times out of 100.

Based on your questions, you should consult with a tax professional for the 2005 tax year, if only to see how it is properly done.

Snipes
 

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