Date: Fri, 17 Nov 2006 14:41:20 -0600
From: Rich Carreiro 
Newsgroups: misc.invest.financial-plan
Subject: Re: Gifting appreciated stock
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joetaxpayer  writes:

> I understand that when gifting appreciated stock, there must be a long
> term gain to take the current value as a charitable deduction
> (otherwise if short term, the deduction is limited to cost, in which
> case one comes out ahead selling the stock and donating cash.)
> 
> Is there any such restriction on gifting to an individual? 

No.  The rule for gifts to individual is relatively simple:
* If the asset is held at a paper gain when it is gifted,
  the recipient takes on the giver's basis and holding period.

* If the asset is held at a paper loss when it is giften,
  the receipient takes on a dual basis.  To wit, if the asset
  is sold for less than FMV on day of gift, basis is FMV
  on day of gift.  If asset is sold for more than giver's basis,
  basis is giver's basis.  If asset is sold in between those
  numbers, basis is sales proceeds.  I believe holding period
  tracks accordingly.

See IRS Pub 550.

-- 
Rich Carreiro                            rlcarr@animato.arlington.ma.us