Scarlett Posted March 2, 2015 Share Posted March 2, 2015 I was given some stock anonymously.......either that or someone made a mistake and no one wants to admit it. I've made phone calls asked where it came from and no one seems to know. Ok...well it has been sitting there for 3 years now....and has shot ip in value. What happens when I sell it? Since I paid nothing for it I will be paying taxes on all of it? I am nervous about it. Quote Link to comment Share on other sites More sharing options...
5of5 Posted March 2, 2015 Share Posted March 2, 2015 Yes, you'll have to pay capital gains. Since it has been more than 1 year, it will be long-term capital gains. I don't recall off the top of my head what the rate is, but since it isn't 100%, you'll still have money in your pocket! ETA: long-term capital gain tax rate is 0% for the 10%–15% brackets; 15% for the 25%–35% brackets; and 20% for the 39.6% bracket (from Google). I'm not a tax account, but I believe this applies just to the capital gain itself. So, if the stock is worth $1,000, you should end up with a net of $800 even in the worse case scenario. 1 Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 2, 2015 Author Share Posted March 2, 2015 Yes, you'll have to pay capital gains. Since it has been more than 1 year, it will be long-term capital gains. I don't recall off the top of my head what the rate is, but since it isn't 100%, you'll still have money in your pocket! ETA: long-term capital gain tax rate is 0% for the 10%–15% brackets; 15% for the 25%–35% brackets; and 20% for the 39.6% bracket (from Google). I'm not a tax account, but I believe this applies just to the capital gain itself. So, if the stock is worth $1,000, you should end up with a net of $800 even in the worse case scenario. Thank you that is very helpful! Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted March 3, 2015 Share Posted March 3, 2015 I *think* your basis might/should be the value it had when you received it, so, if, when you received it, the value was $100/share, and now it is $200/share (when you sell it), you'd just pay capital gains on the value that you "gained" during the intervening time period. The value it had when you first received it should be "free to you" as a gift . . . But, I'm not certain about that . . . I know when I sold stock that I'd been given by my dad, I paid tax on *his* basis of 2c/share . . . I'm not sure how that works, but it is definitely worth looking in to make sure you claim the correct basis. (I was in a very low tax bracket at that time, and wasn't using a CPA for tax advice . . . If I were doing it now, I'd ask a CPA for sure if my googling didn't turn up a reliable answer.) 1 Quote Link to comment Share on other sites More sharing options...
5of5 Posted March 3, 2015 Share Posted March 3, 2015 I'm not a tax expert, but it seems to me that if you are going to claim that the basis was whatever it was worth when the stock was received, you would also have had to claim that value as a gift on your taxes for that year. I don't see how you could have it both ways! However, I think a certain amount of gifts are tax-free, so if that applies, you may be OK. Definitely needs looking into! Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 3, 2015 Author Share Posted March 3, 2015 It would be less than 5k so under the gift limit for sure. How do I prove it was a gift? Quote Link to comment Share on other sites More sharing options...
allyphoe Posted March 3, 2015 Share Posted March 3, 2015 Your basis is the donor's basis, in most cases. It absolutely is not the value at the time you received it. Basis is presumed to be zero in the absence of any other evidence. "The lowest split-adjusted price the stock has ever traded at" is probably a reasonable number to use, although it may be an over-estimate if the donor received the stock in a merger. Quote Link to comment Share on other sites More sharing options...
allyphoe Posted March 3, 2015 Share Posted March 3, 2015 Also, the recipient never pays tax on the receipt of a gift. Gift tax is an entirely different thing, and wouldn't affect your basis unless and to the extent that the person who gave you the stock paid gift tax. Quote Link to comment Share on other sites More sharing options...
5of5 Posted March 3, 2015 Share Posted March 3, 2015 It would be less than 5k so under the gift limit for sure. How do I prove it was a gift? Since it was anonymous, you can't. Also, you can't know the donor's stock basis either. It seems that, if you want to be ultra-safe, you could always use zero as the basis. If you don't mind saying, how did you get anonymous stock? Did the certificates just show by snail mail one day? Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 3, 2015 Author Share Posted March 3, 2015 Since it was anonymous, you can't. Also, you can't know the donor's stock basis either. It seems that, if you want to be ultra-safe, you could always use zero as the basis. If you don't mind saying, how did you get anonymous stock? Did the certificates just show by snail mail one day? Shares showed up in my account. I thought the acct was empty so when they sent me a statement I called to see what the deal was. There was a lot of um, well, oh, hmm......from the broker....he said he would look further into it and he called me back to tell me they had been there for almost a year ( at that time) but their records weren't showing where they came from. Weird huh? Quote Link to comment Share on other sites More sharing options...
5of5 Posted March 3, 2015 Share Posted March 3, 2015 Yes, that’s very weird. I’d be worried that it was a computer error. After all, if it was a real transfer, there simply has to be records of where it came from. But, a computer glitch might not show the source since it was an error. Is there any way you can get the firm handling the account to state in writing that it is yours free and clear? I’d hate to sell it, use the money, and then have them come after you later. I wonder what the statute of limitations on something like this is!? Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 3, 2015 Author Share Posted March 3, 2015 Yes, that’s very weird. I’d be worried that it was a computer error. After all, if it was a real transfer, there simply has to be records of where it came from. But, a computer glitch might not show the source since it was an error. Is there any way you can get the firm handling the account to state in writing that it is yours free and clear? I’d hate to sell it, use the money, and then have them come after you later. I wonder what the statute of limitations on something like this is!? IKR! That is why I've just sat on it for 3 years. It is stock from my xh's company....I got a lot of it during the divorce.....I suspect his company accidentally deposited it into my account....I even asked XH if he gave it to me and he said NO! ( lol) and HE tried to figure out if it was his. He got no where...he said they wouldn't discuss my account with him... There is this little thought in the back of my mind that his x girlfriend....(the one who contributed to the demise of my marriage) had something to do with it. That was her job at his company... Quote Link to comment Share on other sites More sharing options...
Um_2_4 Posted March 3, 2015 Share Posted March 3, 2015 It is possible if it was from your xh's company that there was a settlement of some sort and if you used to own shares in it that could be yours from that? Quote Link to comment Share on other sites More sharing options...
5of5 Posted March 3, 2015 Share Posted March 3, 2015 Interesting. I can’t comment on the girlfriend theory, though she’d have to be either dumb to risk a felony (if this wasn’t her stock) or scary smart to pull this off and leave no trace. For a second I wondered if someone discovered that you ought to have gotten more stock than you did as part of the divorce, but I can’t see your X not knowing about it. If you didn’t need the money, I’d be tempted to sell it as you saw fit and keep the cash in a CD for a few years more. Then, if still no one came after it, then I’d feel more confident about using the money. Quote Link to comment Share on other sites More sharing options...
Annie G Posted March 3, 2015 Share Posted March 3, 2015 When we sell stock we get a statement that details what the basis is, selling price, etc. I think when you sell it you'll find out what they expect you to use as the basis. Even with stock granted by dh's employer we get a statement that tells the basis. You could put the money into a traditional IRA if you want to avoid paying tax on it. The long term capital gains tax won't be that much, though, so since it's unexpected money you might prefer to just save it or spend it. Sure is tempting to cash it out before anyone questions why it's there in the first place! Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 3, 2015 Author Share Posted March 3, 2015 I agree the girlfriend would be a fool to risk a felony charge....but since my last name on the account was still same as XH's it would be very easy to make a mistake. She probably didn't do it...certainly not on purpose...I mean what's that? Sorry I broke up your marriage here's some stock. Lol....cracks me up. Personally my theory is it belongs to xh....all he would have to do is go ask the accounting department at his company where is his stock...maybe he hasn't because he too fears opening up the can of worms possibility that the girlfriend did it. Either that or the broker made a mistake and don't want to admit it until forced to? They acted weird.....I too agree they should be able to see where it came from. Quote Link to comment Share on other sites More sharing options...
5of5 Posted March 3, 2015 Share Posted March 3, 2015 When we sell stock we get a statement that details what the basis is, selling price, etc. I think when you sell it you'll find out what they expect you to use as the basis. Even with stock granted by dh's employer we get a statement that tells the basis. Except that the firm states that they don't know where it came from, which, as far as I can see, directly implies that they can't possibly say what the basis is. Quote Link to comment Share on other sites More sharing options...
5of5 Posted March 3, 2015 Share Posted March 3, 2015 Sorry I broke up your marriage here's some stock. Lol....cracks me up. But, you've heard of the "peace dividend" haven't you? :rofl: Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 3, 2015 Author Share Posted March 3, 2015 But, you've heard of the "peace dividend" haven't you? :rofl: LOL Quote Link to comment Share on other sites More sharing options...
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