Stepfather gifted me thousands of shares of stock, what happens now?

Seeking Advice
1

My stepfather recently gave me (26F) a few thousand shares of stock in a startup he’s been invested in for a few years. When he bought the shares, they were around $14-$15 each, but now they’re worth less than a dollar per share. When I checked my account, it showed a -90% loss and a total balance of -$29,000. Right now, the shares are worth under $2,000. He mentioned that there are some upcoming catalysts that could make the stock go up.

As for taxes, he told me that since the current value of the gift is only $2,000, I wouldn’t owe anything. Is that correct?

If I sell the shares for less than the price he originally paid (~$14-$15 per share), does that count as a loss for tax purposes? Or does my tax basis start from the $1 per share price when I received them?

My stepsister also got some shares, and she’s a little suspicious of his reasons for gifting them. Could this benefit him in any way tax-wise?

Anything else I should know before deciding whether to sell in the future?

2

Your stepfather doesn’t get any tax benefits from gifting you these shares. In fact, he likely lost a big opportunity to claim a capital loss for himself.

If he had sold the shares first, he could have claimed a loss of over $60k to offset other gains or up to $3k per year against his regular income. Instead, by gifting them, he passed them to you with no tax advantage for himself.

It would have been better for him to sell the shares, book the loss, and then gift you the cash if he wanted you to have the money.

Long story short—don’t take tax advice from him.

3

@Aubrey
A way he could have structured it better:

  1. Sell the shares himself and claim the loss
  2. Gift you the $2,000 in cash

That way, he gets the tax benefit, and you get the same amount of money in the end.

4

@Aubrey
I was mainly wondering if there was any hidden benefit for him. I guess the loss itself was already a sign that we shouldn’t take financial advice from him, haha. Thanks for clearing that up!

5

Titus said:
@Aubrey
I was mainly wondering if there was any hidden benefit for him. I guess the loss itself was already a sign that we shouldn’t take financial advice from him, haha. Thanks for clearing that up!

Why are you being so dismissive? Maybe he just wanted to do something nice for you and your stepsister. Not everything has to be about tax strategy. Maybe he sees potential in this company and wanted to share it with you.

6

@Cassian
Reddit has a way of turning every gift into some kind of scheme or hidden motive.

7

@Cassian
The issue isn’t the gift—it’s that he gave away shares that have dropped 90% in value and still believes they’ll skyrocket. It just makes him seem a little out of touch financially.

8

@Aubrey
If he doesn’t have other capital gains to offset, he at least could’ve claimed $3,000 per year against ordinary income. Now that’s gone.

9

Gabi said:
@Aubrey
If he doesn’t have other capital gains to offset, he at least could’ve claimed $3,000 per year against ordinary income. Now that’s gone.

Exactly. That loss could have been useful to him for years to come if he didn’t have enough gains to offset.

10

If you hold onto the shares, there are no tax implications. If you sell them, you’ll owe taxes on any gains.

Here’s how it works:

  • If you sell them for less than what they were worth when you received them (~$1/share), then your loss is based on the value at the time of the gift.
  • If you sell them for more than they were worth when gifted, but less than his original cost (~$14-$15/share), there’s no gain or loss.
  • If you sell them for more than he originally paid, your gain is based on his original purchase price.

So unless the stock somehow jumps above $14-$15 per share again, you won’t have a capital gain issue.

11

@Callie
To break it down:

  1. Sell for less than the value at gift time → Use the value at gift time for the loss.
  2. Sell for more than value at gift but less than stepfather’s cost → No gain or loss.
  3. Sell for more than stepfather’s cost → Use his cost basis for gain calculation.
12

This was a bad move for him tax-wise. He had a valuable tax loss that could have offset future gains or reduced his taxable income. Now that’s gone.

13

Since it was a gift and the company might bounce back, you could just hold onto it and see what happens. Worst case, you didn’t lose anything personally.

14

Thane said:
Since it was a gift and the company might bounce back, you could just hold onto it and see what happens. Worst case, you didn’t lose anything personally.

Another way to look at it—if someone gave you $2,000 in cash, would you choose to buy this stock? If not, maybe consider selling it now.

15

You don’t owe any taxes on receiving the gift. If the gift was worth more than $18,000, your stepfather would have to file a gift tax form, but even then, he wouldn’t owe tax unless he exceeded the lifetime exemption.

For tax purposes, your cost basis is either his original price or the value when you received the shares, depending on whether you sell at a gain or loss.

16

You might want to see if you can transfer it to a Roth IRA. If the stock does bounce back, you could sell it tax-free inside the account and reinvest in something more stable.

17

Even if the stock had been worth millions, you wouldn’t have owed taxes on receiving it. Gift taxes are the giver’s responsibility, not the receiver’s.

18

Before deciding what to do, research the company. Check financial reports, funding rounds, and whether they have any realistic path to profitability. Don’t rely on hype.

19

You’re under the annual gift exclusion, so there are no tax issues there. Your only concern is capital gains taxes if you sell at a profit.

20

I would just hold onto it and see if anything happens. Maybe it turns into something, maybe not.