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Originally Posted by LWJ
We have gifted shares of stock in my family. I was not the giver, so I can't say what was involved.
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Originally Posted by jmaxwell
As I understood it, if you gift the stock while alive, then the basis is passed on as well. If passed on as an inheritance, then the basis for the recipient will be the value at the time of the death of the giver.
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Originally Posted by wildthing
Stocks are good to inherit because generally the recipient accepts it at the stepped up cost basis, not the original cost basis of the giver. Generally could be done through your broker, or through a trust.
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If he gifts the stock to his grandchildren, they'll have to sell the stock to use the funds for things like 529 plans/college. I don't think you can invest in individual stocks in a 529 plan. Then there will be capital gains to pay (which we're trying to avoid). Especially if there is no step up cost basis.
Then again, maybe there is a step up cost basis....
My parents were both joint account owners. Or, rather, I think their living revocable trust was the account owner (and they were the two trustees). My mother recently passed away (which is why my Dad has been looking into all these accounts). California is a community property state, so when there is the death of one partner, property can be re-assessed in value. At least property like houses can be, which has huge implications in capital gains. So perhaps the stock would be re-assessed at the time of my mother's passing (?), in which case the capital gains would be minimal.