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. What are the restrictions for naming a given individual as my contingent beneficiary?

    Understand what restrictions may exist, depending on your state and the policy you choose, on naming your life insurance ...
  2. Why are some spin-offs taxable and some are tax-free?

    Learn how spinoffs of subsidiaries from a parent company are typically done, and what determines whether a spinoff is taxable ...
  3. What is the difference between income tax and capital gains tax?

    Understand the difference between a person's income tax and his capital gains tax. Learn when a person needs to pay taxes ...
  4. What are the risks involved in a banker's acceptance?

    Learn about the different kinds of college savings accounts, how they can benefit a college saver and how to open these savings ...
RELATED TERMS
  1. Contingent Beneficiary

    1. A beneficiary specified by an insurance contract holder who ...
  2. Guideline Premium And Corridor Test (GPT)

    A test used to determine whether an insurance product can be ...
  3. Cash Value Accumulation Test (CVAT)

    A test method used to determine whether a financial product can ...
  4. Capital Growth

    The increase in value of an asset or investment over time. It ...
  5. Variable Annuitization

    An annuity option in which the amount of income payments received ...
  6. Average Cost Basis Method

    A system of calculating the cost basis on mutual fund positions ...

You May Also Like

Related Articles
  1. Professionals

    'Tis The Season For Tax-Loss Harvesting

  2. Investing Basics

    Passing Boomers Will Leave A Big Economic ...

  3. Investing Basics

    Know Your Stock Cost Basis

  4. Investing News

    There Are New REITs On The Horizon

Trading Center