Stocks Flashcards

Gifts

1
Q

Inherit stocks

A
  1. Stepped up basis for the receiver to FMV (No NBV needed)
  2. holding period is long term - regarldelss of how long you own it.
  3. if alternative evaluation date is selected use the price at that date - not the FMV
    -Holding period for alternative date it will also be long term
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2
Q

Gifts stocks

A

Rule I: If FMV > NBV (appreciated) use rollover - meaning use donors NBV
–All I do here is multiply number of shares times the amount per share
–Holding period will be the date the donor purchased the stock

Rule II: If FMV < NBV (deprecated) the basis & holding period depends en el precio que la persona que recivio el stock lo vende.
–If sold for more than donors NBV then use donors basis - gain - and same holding period
–If sold for less than FMV use FMV - NO ROLLOVER holding period - USE date of GIFT
–If sold in the middle of FMV & NVB - NO gain or loss - No holding period

*** For rule II if the donee does not sell the gift stock $0 to recognize

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3
Q

Split Stocks

A

Ignore value from received stocks/split stocks if I sell of of them -
~Meaning if I bought 100 stocks for $200 per share totaling $20,000. and they split 2-1 - now I have 200 stocks value a $100 per share.
–So if I sell all 200 stocks (No need to do math from difference between before and after split) Just subtract the total from the original 100 stocks purchase minus the cost of money received when sold

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