When selling a gifted stock, is the entire value considered taxable income, or is the original cost basis used to calculate the difference? Thank you


1 Answer 1


In 2022, the IRS gift limit is $16000.

If the value of the shares at the time they were given was above this threshold, then the gift is reportable to the IRS and is likely taxable (assuming the giver is not your spouse).

According to this FAQ from the IRS, the cost basis and purchase date are preserved across the transfer. So as long as the giver owned the shares for more than a year, you will be paying long-term capital gains against the original cost basis when you sell.

  • 1
    It might help if you define taxable, since (I'll guess) 99% of the time, even gifts over $16000 do not require any tax to actually be paid.
    – TTT
    May 2, 2022 at 18:35

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