Sunday, July 8, 2007


Ray wonders:
If I "gift" some shares of a mutual fund via a broker to broker transfer is this a taxable event (regular or AMT) for me?

My reply:
Hello Ray!

Since you have the word gift in quotes and you did not provide me with any more information, I will assume that you are speaking of a plain old-fashioned, "Here, I want you to have this" gift; however, if it's something else, then the correct answer to your question may get more complicated.

If it is a true gift, then it is not taxable for Federal or AMT purposes; however it may be subject to gift tax if the value of the gift is more than $12,000.

Please make sure that if you make the gift, the recipient gets a separate letter from you detailing the cost basis and purchase dates of the shares transferred.

Best wishes,

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