There are benefits to giving stock as a gift, and this is a particularly good year to place investments under the Christmas tree.
"When there is a low or depressed market, giving stock can be advantageous because you are able to transfer a given stock at a price that is lower than it has historically been," said Emily Irwin, a wealth management executive at Wells Fargo."This can be advantageous if funding a trust for someone where that stock is going to be held for a longer time period."
"If you gift stock, it has carryover basis. If I gift it to my child and they decide to sell it, he or she would pay capital gains tax. That's the negative for the recipient from a financial perspective," Irwin said."And it's negative for the giver if the intention is, 'I want to give $100 in stock,' because really, there will be a 20% haircut taken off of it." When giving stocks to charities, there are advantages to both the donor and recipient.