can i give stock as a gift? How-to Guide

Can I Give Stock as a Gift?

If you ask "can i give stock as a gift", the short answer is yes — you can give shares of publicly traded companies and many other securities to other people. This article explains how gifting stock works, the most common transfer methods, the U.S. legal and tax framework to consider, practical steps and documentation, special cases (like employer securities and minors), and brief examples you can use to plan a transfer. It also highlights when to consult a tax professional and how Bitget and Bitget Wallet can help manage and transfer digital assets where applicable.

As of 2024-12-31, according to IRS guidance and Investopedia reporting, gift-tax rules require filing Form 709 for taxable gifts exceeding the annual exclusion; check the IRS for the most recent thresholds before you act.

Definition and scope

Gifting stock means transferring ownership of shares or other securities from one person or entity (the donor) to another (the recipient) without receiving equivalent payment. When you gift stock you are changing legal ownership; this is different from selling stock (where you receive cash or another consideration) and from giving cash.

Common types of securities that are typically giftable:

• Publicly traded company shares (common and many preferred shares)
• Exchange-traded funds (ETFs)
• Mutual fund shares (subject to fund rules)
• Some corporate bonds and government securities

Securities that are commonly not freely transferable or require special handling:

• Unvested restricted stock units (RSUs) and many stock options — plan rules often prohibit transfer before vesting
• Employer shares held in certain retirement plans or under restrictive agreements
• Some privately held or restricted securities that require company approval or are subject to transfer restrictions

If you are uncertain whether a specific holding can be gifted, check the plan documents, broker rules, or consult the issuing company.

Why people gift stock

People gift stock for several practical and financial reasons:

• Tax efficiency: Gifting appreciated stock can transfer future capital-gain tax burdens to someone else (who may be in a lower tax bracket) or allow charities to avoid capital-gain realization.
• Charitable giving: Donating appreciated publicly traded shares to a qualified charity often produces larger tax benefits than donating cash.
• Teaching and incentives: Parents and mentors use gifted stock to teach investing to young people or to incentivize recipients.
• Estate and gift planning: Moving assets during life can reduce estate size or facilitate multi-generational wealth transfer.
• Liquidity and diversification for recipients: A recipient may prefer to hold or sell gifted shares to meet personal goals.

Legal and tax framework (U.S. focus)

Gifts of stock are governed by a combination of federal tax rules and, in some cases, state law. The following points summarize common U.S. federal rules; these are a framework, not individualized tax advice.

• Annual gift tax exclusion: The federal tax code allows an annual exclusion amount for gifts to each recipient (this amount is adjusted periodically for inflation). If you give more than the annual exclusion to one person in a tax year, you generally must file IRS Form 709 (United States Gift (and Generation-Skipping Transfer) Tax Return).

• Lifetime gift/estate tax exemption: Taxpayers also have a lifetime unified gift-and-estate tax exemption that reduces or eliminates gift/estate tax until that exemption is used up. Gifts above the annual exclusion reduce the lifetime exemption when you report them.

• Filing and reporting: Donors (not recipients) are responsible for gift-tax reporting obligations. Even if no gift tax is owed because the gift is covered by exclusions/exemptions, filing may still be required when gifts exceed the annual exclusion.

• Spousal gifts and special rules: Gifts to a U.S. citizen spouse are generally unlimited (no annual exclusion limit), but gifts to a nonresident/noncitizen spouse are subject to special rules and a different annual limit. Married couples can elect to split gifts for reporting purposes under specific rules.

• State rules: Some states may have estate or inheritance taxes that interact with federal rules. State-level gift taxes are uncommon but check local law.

Always consult a tax advisor or estate attorney to confirm current annual exclusion amounts, lifetime exemption figures, and filing requirements for your situation.

How gifting affects cost basis and holding period

When you gift stock, tax rules determine how the recipient's cost basis and holding period are treated for future capital gains/losses:

• Cost basis (carryover basis): In most cases, the recipient "takes over" the donor's cost basis. If the donor originally paid $1,000 for shares that are worth $5,000 at the time of the gift, the recipient's basis will usually be $1,000.

• Holding period (carryover holding period): The recipient typically inherits the donor's holding period. That means if the donor held the shares for two years before gifting, the recipient's holding period includes that two-year span for determining short-term vs. long-term capital-gain status.

• Special loss rule when FMV < donor basis: If the fair market value (FMV) of the stock at the time of the gift is less than the donor's basis, special dual-basis rules apply. For purposes of determining loss on a subsequent sale, the recipient's basis for loss purposes may be the FMV at the time of the gift, while for gain purposes it is the donor's basis. This means a sale could produce no deductible loss or taxable gain depending on sale price relative to the two values.

These rules make timing and value important considerations when gifting depreciated assets or planning transfers for tax efficiency.

Methods to give stock

There are several practical ways to transfer stock as a gift. Which method you choose depends on whether securities are held electronically or as certificates, the recipient's age and account type, and whether you want to give during life or pass on at death.

Broker-to-broker (in-kind) transfer

One of the most common and efficient methods is an in-kind transfer between brokerages. The donor instructs their broker to transfer shares directly to the recipient's brokerage account. Key points:

• Recipient must have an eligible brokerage account that accepts the transferred security.
• Broker-to-broker transfers typically use the Depository Trust Company (DTC) system for U.S. securities or an equivalent clearing system.
• The donor will usually need the recipient's brokerage name, account number, and sometimes Social Security number or TIN to complete the transfer.
• Expect transfer forms or an online transfer process; processing time ranges from a few business days to a few weeks depending on brokers and security types.

If you plan to transfer between different brokerages, ask your broker for the receiving firm’s DTC/firm number and any required transfer forms. When both parties use the same broker, transfers are often simpler.

Transfer within the same broker

If both donor and recipient hold accounts at the same brokerage, internal transfers or ACAT-style moves may be much quicker. Many brokerages provide an online "transfer between accounts" feature. Expect streamlined ID checks and minimal paperwork.

For transfers within the same platform, check whether the broker supports transferring fractional shares or shares held in special accounts.

Physical stock certificates

Physical certificates are increasingly rare for public companies but still possible. Transferring certificate-based shares requires:

• Endorsement on the back of the certificate or a stock power document
• A signature guarantee from an eligible financial institution (often called a Medallion guarantee)
• Delivery to the transfer agent or receiving broker for re-registration in the recipient's name

Physical transfers are slower and may incur additional fees. If you hold certificated shares and want to gift them, contact the transfer agent or broker for instructions.

Custodial accounts for minors (UGMA/UTMA)

To give stock to a minor, you can open a custodial account under laws such as UGMA (Uniform Gifts to Minors Act) or UTMA (Uniform Transfers to Minors Act):

• An adult custodian manages the account for the minor until the statutory age (which varies by state).
• Gifted assets become the child's property, though the custodian controls investment and distributions.
• Contributions are irrevocable gifts and may have annual tax considerations.
• The child’s unearned income may be subject to the "kiddie tax", which can tax investment income at the parents’ tax rate under certain thresholds.

UGMA/UTMA accounts are a common and straightforward way to give stock to children while preserving legal protection and clear documentation.

Buying shares for someone and transferring

You can buy shares specifically for someone and then transfer them into the recipient’s account. This still requires the recipient to have a brokerage account that can accept a transfer. Some brokerages and gifting services sell single shares or fractional shares intended as gifts; verify transferability and whether the broker supports moving those shares out later.

Stock-gifting platforms, gift cards and gift certificates

A number of third-party services offer stock-themed gift cards, single-share purchases, or digital gift certificates that can later be redeemed for shares. When using these services:

• Confirm whether the gift product results in shares being held on behalf of the recipient or a transferable certificate.
• Check transfer rules and fees before purchase.
• Prefer platforms that clearly allow recipients to transfer holdings to their chosen brokerage or to Bitget Wallet when dealing with tokenized or digital securities.

Donating appreciated stock to charity

Donating appreciated publicly traded shares directly to a qualified charity is often tax-efficient:

• If you itemize deductions, you may be able to deduct the fair market value of the donated shares at the time of gift (subject to AGI limits and other rules).
• The charity usually sells the shares tax-free, so the donor avoids realizing capital gains on the appreciation.
• Documentation requirements include a contemporaneous written acknowledgment from the charity for gifts over certain thresholds and brokerage records showing the transfer.

Charitable donations of stock can offer both philanthropic and tax advantages over selling shares and donating cash.

Transfer-on-death (TOD) and beneficiary designations

If you prefer to transfer shares at death instead of during life, register brokerage accounts or specific securities with a Transfer on Death (TOD) designation or use beneficiary designations that pass assets outside probate. Benefits:

• TOD transfers occur on the account holder’s death and avoid probate.
• Beneficiaries often receive a stepped-up basis (see the "How gifting differs from bequests" section below), which can reduce capital gains tax when they later sell.

TOD is an estate-planning tool and not a gift during life; consult an estate attorney to ensure it fits your plan.

Practical steps and documentation

A practical checklist for giving stock helps avoid delays and ensures tax and record-keeping needs are met:

1. Confirm the recipient has an eligible brokerage account or custodial account and get exact account details (account title, number, broker name).
2. Contact your broker to learn their transfer procedures. Ask for required forms, whether a DTC/firm number is needed, and any fees.
3. If transferring to a different brokerage, obtain the receiving broker’s DTC/firm number and transfer instructions.
4. Provide identification and tax information if required (e.g., SSN/TIN for recipient).
5. Specify the number of shares, exact security identifier (ticker and CUSIP if available), and desired transfer date.
6. Document the transfer date and the fair market value (FMV) on that date for tax records. Save broker confirmations and statements showing the gift.
7. If the gift exceeds the annual exclusion amount, track for Form 709 reporting and coordinate with your tax preparer.
8. Consider including a cover letter specifying that the transfer is a gift to avoid confusion over sales, indebtedness, or returns.

Broker cutoffs and processing windows matter for year-end gifts. If you want the gift to qualify for a specific tax year’s annual exclusion, initiate transfers well before December to allow for processing delays.

Tax reporting and compliance details

Understanding the tax implications for both donor and recipient reduces surprises later. The following subsections summarize common reporting and tax outcomes in U.S. practice.

Donor reporting (gift tax)

• Filing Form 709: Donors are generally required to file IRS Form 709 when gifts to any individual exceed the annual gift tax exclusion for the year. Filing is required even if no gift tax is owed because the amount is covered by the lifetime exemption.

• Gift splitting: Married couples can elect to split gifts for Form 709 purposes so that spouses treat gifts as if each made half the gift. Special rules and signatures apply.

• Documentation: Keep records of what was transferred, transfer confirmations, FMV at transfer, and any communications about the gift.

Because gift-tax rules change, check the IRS website or a qualified tax advisor for current filing thresholds and procedures.

Recipient tax consequences (capital gains and dividends)

• Dividends: After a gift transfers shares to the recipient, dividends are taxable to the person who receives them. If the donor declares but does not pay a dividend before transferring, timing rules determine who reports dividend income.

• Capital gains when selling later: The recipient will owe capital gains tax based on the donor’s cost basis and the recipient’s holding period (carryover basis and holding period rules described earlier). The tax rate depends on whether the holding period is short-term or long-term and the recipient’s tax bracket.

• Tax planning opportunity: If the recipient is in a lower tax bracket, transferring appreciated stock may reduce the combined tax cost when the recipient sells. But consider the loss-basis rules, the kiddie tax, and potential state taxes.

Gifts to minors and the "kiddie tax"

• The kiddie tax rules can tax a child’s unearned income (including dividends and capital gains) at their parent’s tax rate above certain thresholds.

• For gifts to minors via custodial accounts (UGMA/UTMA), track the child’s unearned income and filing thresholds; plan with a tax advisor about potential adverse kiddie tax effects.

Gifts to charities and tax deductions

• If you donate appreciated publicly traded shares to a qualified public charity and you itemize deductions, you are generally eligible to deduct the fair market value of the shares on the date of the gift (subject to certain AGI limitations and documentation rules).

• The charity is generally tax-exempt and can sell the donated shares without the donor recognizing capital gains, making this route an efficient way to give appreciated assets.

• For large donations, additional appraisal or written acknowledgment rules may apply; keep donation confirmations and brokerage transfer records.

Special situations and complications

Certain holdings and recipients create additional complexity when gifting stock.

Employer securities, RSUs, and options

• Many employer equity awards are nontransferable until vesting, and plan documents frequently prohibit gifting pre-vesting.

• Even after vesting, company policies, insider trading windows, and company-imposed restrictions (blackout periods) may affect whether you can transfer or sell shares.

• Check your equity plan documents and company transfer agent rules before attempting a gift.

Fractional shares and DRIPs

• Some brokerages or dividend reinvestment plans (DRIPs) produce fractional shares. Not all brokers accept inbound transfers of fractional holdings.

• When gifting shares that originated as fractional holdings, confirm the receiving brokerage's ability to accept and maintain fractional positions or whether the fractional piece needs to be cashed out first.

International recipients and non-U.S. tax issues

• Cross-border gifts raise residency and tax issues in both donor and recipient jurisdictions. Recipients may face local taxes, reporting requirements, or restrictions on holding foreign securities.

• U.S. donors gifting to nonresident recipients should consider U.S. withholding rules (where applicable), U.S. estate tax exposure, and the recipient’s local tax treatment.

• Consult tax advisors in both jurisdictions for cross-border gifts.

Noncitizen spouses and different exclusions

• Gifts to a spouse who is not a U.S. citizen have a different annual exclusion limit (not unlimited as for a U.S. citizen spouse). This special annual limit changes periodically and should be verified with current IRS guidance.

• A larger lifetime exclusion and estate planning techniques may be used to address cross-national couples’ planning needs.

Depreciated gifts and basis for losses

• When FMV at the time of the gift is lower than the donor’s basis, a dual-basis rule applies: the recipient’s basis for determining loss may be the FMV at gift date, while gain uses the donor’s basis. This dual basis complicates loss harvesting and planning for future sales.

Benefits, risks and planning considerations

Benefits:

• Tax-efficient transfer of appreciated assets (especially when recipient is in a lower tax bracket or when donating to charity)
• Simplifies estate plans by transferring assets during life
• Teaches investing and builds financial literacy for younger recipients

Risks and considerations:

• Market volatility: Shares may change value after the gift is made, which can affect tax outcomes and recipient benefit
• Liquidity: Recipients may need cash but hold stocks; consider whether recipients can sell without adverse tax or timing consequences
• Gift-tax filing burden: Gifts above the annual exclusion require Form 709 and tracking lifetime exemptions
• Control issues for minors: Custodial accounts give control to adults until the child reaches legal age; consider trusts for more tailored control
• Plan and company restrictions: Employer shares, RSUs, and some accounts restrict transfers

Coordinating gifts with broader estate and tax planning is critical. Use custodial accounts, trusts, and beneficiary registrations purposefully rather than relying on ad hoc gifting.

Examples (short illustrations)

1. Gifting appreciated stock to an adult in a lower tax bracket

• Alice gifts shares she bought for $2,000 that are worth $10,000 today to her daughter, who is in a lower tax bracket. If the daughter later sells the shares, she will generally use Alice’s basis ($2,000) and holding period when computing capital gain. Because the daughter’s tax rate is lower, total tax on the $8,000 gain may be less than if Alice had sold the shares herself.

1. Gifting stock above the annual exclusion and filing Form 709

• Bob transfers $50,000 in stock to his friend in one year. If this amount exceeds the annual exclusion for that calendar year, Bob must file IRS Form 709 to report the gift. Whether tax is owed depends on Bob’s remaining lifetime exemption.

1. Donating appreciated shares to a charity

• Carla donates long-held appreciated publicly traded shares directly to a qualified charity. If she itemizes, she can generally claim a deduction for the shares’ fair market value on the donation date. The charity can sell the shares without incurring capital gains tax, so Carla avoids capital gains liability while maximizing the donation’s net benefit.

Frequently asked questions (FAQ)

Q: Do both parties need brokerage accounts to transfer stock?
A: Usually yes — an in-kind broker-to-broker transfer requires a receiving brokerage account. For minors, use custodial (UGMA/UTMA) accounts.

Q: Can I gift fractional shares?
A: It depends on the broker. Some brokers support gifts of fractional shares internally, but transfers between brokers may not support fractional positions.

Q: What happens if the recipient sells right after receiving the gift?
A: The recipient’s capital gain or loss is calculated using the donor’s cost basis and the carryover holding period. Immediate sale simply realizes any gain or loss based on those rules.

Q: Are gifts reversible?
A: Gifts are generally irrevocable once accepted. To reverse a transfer, the recipient must agree to re-transfer the shares.

Q: How does gifting differ from a bequest at death?
A: For gifts made during life, the recipient generally inherits the donor’s basis and holding period (carryover basis). For assets transferred at death, beneficiaries often receive a stepped-up basis to the asset’s fair market value at the decedent’s death, which can reduce capital gains on a later sale.

Related topics

• Gift tax (U.S.)
• Capital gains tax
• UGMA/UTMA custodial accounts
• Transfer on Death (TOD) registration
• Charitable contributions of securities
• Restricted stock and RSU rules
• International gift/tax treaties

References and further reading

Sources consulted for this guide include publications and how-to guides from recognized financial and tax information providers and the U.S. tax authority. Readers should consult the original sources and a tax professional for details and for the most current thresholds and rules:

• IRS (for gift tax rules and Form 709)
• Investopedia (guides on gifting stock and tax rules)
• Vanguard (how to gift stock guidance)
• NerdWallet and SoFi (consumer how-to articles)
• Experian, Finder, and The Motley Fool (practical tips and examples)

Note to editors: Update numeric thresholds (annual gift tax exclusion, lifetime exemption amounts, special spousal limits) annually; current values can be verified on the IRS website.

Final notes and next steps

If you are still asking "can i give stock as a gift" for a specific holding or recipient, the practical next steps are straightforward: confirm transferability with your broker or company plan administrator, gather recipient account details (or open a custodial account for minors), document the FMV and transfer date, and consult a tax advisor about gift-tax reporting and cost-basis implications.

For digital asset holders and web3-native transfers, consider using Bitget Wallet for secure custody and Bitget for trading or transferring tokenized securities where applicable. To explore more gifting and transfer options or to check account setup requirements, contact your brokerage or a qualified tax professional.

Further exploration: read guides on gift tax reporting (Form 709), UGMA/UTMA accounts for minors, and charitable donations of securities to refine your plan and ensure compliant, efficient transfers.