Series 66: 5.1.1.2.6. Tax Basis Of Gifted Securities

5.1.1.2.6. Tax Basis of Gifted Securities

When a living person gives a security to another person as a gift, the recipient’s cost basis is the lower of the (1) giver’s cost basis or the (2) fair market value at the time of the gift. The recipient’s holding period will correspond to cost basis. For example, if the giver has held the security for two years with a cost basis of $