Giving gifts of appreciated stocks and securities not only increases the wealth of a loved one, but decreases your tax burden. Particularly if you are in a higher tax bracket, giving assets you already own can make the gift pay for itself. Luckily, the process is as simple as the result is beneficial. The only downside is that it's difficult to surprise your gift recipient as you'll need several pieces of personal and financial information to complete the transfer.
1. Give paper stock certificates if you have them. These are easy to transfer and don't require the recipient to have a brokerage account. You simply need to record their market value on the day of transfer. Have your accountant assist with recording the transfer for your records and consider having the gift witnessed by a notary public for proof in case of tax audit.
2. Ask your recipient for her brokerage account information, including account number, social security number, address and name as listed on the account. This is necessary if you are transferring stock electronically. If your recipient doesn't have a brokerage or other securities account, she'll need to open one. Many brokerages offer low-commission and flat rate accounts online. Banks sometimes offer discounted rates to customers who open investment accounts.
3. Ask your broker to transfer your intended gift to the recipient. Provide your recipient's personal and account information. Your broker will prepare forms to authorize the transfer that you'll need to sign.
4. Ask your gift recipient to sign the transfer forms, accepting the gift. The law requires the recipient's informed consent to complete a transaction.
5. Return the completed paperwork to your broker and obtain a receipt from the transfer. Save the receipt for tax purposes.
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