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 ways to transfer the ownership of a stock; how it’s done depends on how it is currently being held.
If the stock is being held in certificate form, 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 relates to the transferring of ownership. After the certificate is complete, it will be rendered non-negotiable and becomes transferable. There are also websites, like Oneshare.com, that specifically sell shares of stock to gift to people.
Often though, there will not be a physical copy of the stock, as many investors own an electronic version stored in a brokerage account. To gift this type of stock, the owner needs to provide the recipient’s account information to their broker and request that the stock be transferred to the other party.
(For related reading, see: How to Give a Stock for Christmas.)