A:

Stocks, bonds or any other securities can be transferred as gifts. Giving the gift of stock also has benefits for the giver. If the stock has appreciated in value, the holder can avoid paying the capital gains tax by giving it as a gift. There are two methods in transferring the ownership of a stock, which depend on how it is currently being held.

If the stock is being held in certificate form, then transferring the physical stock will be required. The owner must endorse the stock by signing it in presence of a guarantor, which can be their bank or broker. There may also be a form on the back of the certificate, which relate to the transferring of ownership. After the certificate is filled out and signed, it will be rendered non-negotiable and become transferable. There are also websites, like Oneshare.com, who specifically sell shares of stock that you can gift to people.

Often though, there will not be a physical copy of the stock, as many investors own the electronic version, which stored in a brokerage account. To gift his stock, the owner should gather the brokerage account information of the party they are gifting. The next step is to contact the gifter's broker, pass on the new account information, and order the electronic transfer to the other party.

For more information on stock transfers, read How Does Someone Actually Transact Securities?

RELATED FAQS
  1. How do you file IRS Form 709?

    IRS Form 709 is for reporting gifts subject to gift and generation-skipping transfer taxes. Learn how to file IRS Form 7 ... Read Answer >>
Related Articles
  1. Financial Advisor

    How to Gift Your Way to Lower Estate Taxes

    Estate planning is not just for inheritance. High net-worth individuals, who plan properly, can gift their money and save on taxes.
  2. Insights

    Will Your Gift Card Gift Go Unused?

    An unbelievable amount of money gets wasted in the form of non-redemption: nearly $5 billion a year. These tips will ensure that your gift card gift doesn't go to waste.
  3. Taxes

    What The New Gift Tax Rules Will Mean

    The lifetime maximum for gift taxes is $5.12 million. However, it could drop to $1 million. Here's what that will mean.
  4. Personal Finance

    How To Get Gift Cards At A Discount

    Use these tips whether you're buying someone a gift or just want to score a discount at your favorite stores.
  5. Investing

    How Safe Are Discounted Gift Card Websites?

    Could you buy a gift card online and find out it's worthless? Here's how to protect yourself (and whether you need to).
  6. Insights

    Gifts For People You Aren't That Close To

    Finding a gift for a new boyfriend or girlfriend, your boss, or the postman can sometimes be a challenge.
  7. Retirement

    Estate Planning Law Changes You Need To Know

    When organizing your affairs, you'll need to be aware of tax rates and other regulations.
  8. Personal Finance

    8 Low-Cost Ways To Transfer Money

    If cost is your primary concern, there are several cheap(er) ways to move funds.
  9. Personal Finance

    Transferring Credit Card Balances To A New Card

    Before you take advantage of that new credit card's 0% interest balance transfer offer, read our step-by-step guide.
  10. Investing

    What Does a Transfer Agent Do?

    Transfer agents maintain the records and documents related to shareholder accounts.
RELATED TERMS
  1. Gift

    Property, money or assets that one person transfers to another ...
  2. Gift Tax Return

    A federal tax form that must be filled out by any individual ...
  3. Annual Exclusion

    The amount of money that may be transferred by gift from one ...
  4. Gift Splitting

    A taxation rule that allows a married couple to split a gift's ...
  5. Current Transfers

    A current account transaction in which a resident entity in one ...
  6. Gift Causa Mortis

    A gift to be given at a later date in anticipation of the giver's ...
Hot Definitions
  1. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that decreased and eventually eliminated tariffs to encourage economic activity ...
  2. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  3. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  6. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
Trading Center