How to Gift Stocks

How to Give Stocks

To gift someone stock, you need to be the owner of that stock. The easiest way to acquire stocks is to purchase them through a brokerage account.

Who Can Stocks Be Gifted To

You can gift stocks to anyone – family members or friends. Over the long term, the gift can be valuable if the stock price increases significantly, helping the person start their wealth-building journey or significantly aiding them in that. And if the stock price doesn’t go up, the recipient won’t lose any actual money as they didn’t buy the stock themselves.

How to Gift Stocks

Generally, the first thing you need if you want to gift stocks to someone else is to own the stocks yourself. You’ll need to purchase the stocks in your brokerage account if you don’t already own the stocks and want to gift them to someone.

Stock Gift Card

There are also brokers, like Stockpile, that allow you to purchase a gift card that can be used to buy stocks. The recipient can open an account themselves and redeem the gift card to purchase stocks.

What to Consider: Laws, Regulations, and Reminders

When gifting stocks, there are several aspects to consider. For example, you should take into account the taxes related to the gift and any potential costs associated with transferring the stocks.

Benefits of Gifting Stocks

There are many benefits to giving stocks as a gift. Over the long term, the gift can be valuable if the stock price rises. And even if that doesn’t happen, the person receiving the stock won’t suffer a loss because you paid for the stock. It’s also a great way to introduce children and teens to the concept of investing and provide a more meaningful financial gift than just cash.

Frequently Asked Questions

Is it better to gift stocks or cash?

Unless the recipient plans to put the cash you gift them into a high-yield savings account or an investment account, the cash you gift them will remain fixed; it won’t grow on its own. If you gift stocks, there’s a chance the value may increase over the long term, giving the recipient an incentive to hold onto the stock for a while before selling it.

How can I gift stocks without paying taxes?

As long as the amount of stock you gift is below the gift tax limit that applies to your situation, you won’t have to pay taxes on the gifted stocks. You should also consider the tax implications for the recipient. When you gift stocks, the recipient must pay taxes on any capital gains they realize when they sell the stocks.

Source: https://www.thebalancemoney.com/how-to-give-stock-as-a-gift-358132