1

I am looking for a way to transfer a stock that has done well into a safer investment (like an index fund). I assume the only way I can do this is sell the stock, pay the tax owing, and buy new stock.

I do remember reading something about you can transfer the ownership of the stock (e.g. into a Children's Trust) but not sure if that is realistic.

I know the 1031 Exchange is a real estate tax benefit to encourage reinvestment in property and I just wondered if there is anything similar for securities.

  • Do you have access to retirement accounts such as a 401K or an IRA? – mhoran_psprep Oct 28 '14 at 19:47
  • Yes I do Have IRA and Roth-IRA – Mr. Tony Jessup Oct 28 '14 at 20:32
3

Sale of a stock creates a capital gain. It can be offset with losses, up to $3000 more than the gains. It can be deferred when held within a retirement account. When you gift appreciated stock, the basis follows. So when I gifted my daughter's trust shares, there was still tax due upon sale. The kiddy tax helped reduce but not eliminate it. And there was no quotes around ownership. The money is gone, her account is for college.

No 1031 exchange exists for stock.

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