How to Give Stock as a Gift (And Why Tax Pros Like The Idea)

Is it better to give than to receive? Certainly. But giving while receiving a tax benefit is pretty good, too.
Chris Davis
By Chris Davis 
Edited by Arielle O'Shea Reviewed by Michael Randall

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Nerdy takeaways
  • Gifting stocks may be a way to both give and avoid paying capital gains taxes.

  • Instead of donating cash, investors can donate stock to charities.

  • Investors can donate stock to their kids through custodial accounts.

  • Stock can be gifted to friends and family as a way of building wealth.


What's a gift that's more thoughtful than a stack of cash, doesn't require leaving the house and keeps on giving longer than a jelly-of-the-month club membership? Stock.

This year may be an ideal year to gift stock, considering ongoing supply chain delays. This means the gifts you'd like to buy may not be on shelves, and even if they are, inflation could be making them too pricey anyway.

Gifting stock is easier than you think, and doing so may offer a few perks for you, too.

The benefits of gifting stocks

Hang around seasoned investors long enough, and you’ll likely hear a familiar refrain: If only I’d started investing sooner. Giving stocks as a gift can help your family and friends put this advice into practice — especially kids, who may benefit most from long-term compounding returns.

And if you’re giving stocks you already own, there could be a tax advantage for you. From a tax perspective, gifting is a smart way to transfer an appreciated stock, says Karl Schwartz, a certified public accountant and principal at Team Hewins in Boca Raton, Florida.

"Let’s say you’re an adult and you have this stock with a lot of gains built into it. If you were to sell it, you would pay taxes on the gain. Assuming it’s long-term, you might pay 15%," he says. But instead of selling the stock, you could give it as a gift, transferring the gains to the recipient.

"The person who received the stock now has that appreciated stock. They can hold it if they want, but if they sell it, assuming they’re in a lower tax bracket, they might pay 0% in capital gains taxes," Schwartz says.

In other words, both the giver and receiver could avoid paying capital gains altogether on stock that’s been appreciating for years. (Learn more about how capital gains taxes work.)

That’s not the only route to giving stocks, though. You can also buy stocks or other securities you don’t already own, then gift them. Here are four ways you might consider gifting stocks this year.

Tax Planning Made Easy
Take the stress out of tax season. Find the smartest way to do your taxes with Harness Tax.

1. To give to charity the wise way

As long as the charity is set up for it, donating stock instead of cash can be a smart way to do good this holiday season.

For example, if you want to donate $1,000 to a charity but have to dip into your portfolio to raise the cash, you might pay capital gains taxes on that sale, netting you less than $1,000 to donate. But if you gave $1,000 in stock instead, there’s no tax consequence for you because you’re not realizing any of the gains, and the charity won’t pay taxes when it sells the stock since it's a tax-exempt entity. What’s more, you may be able to claim a fair market value charitable deduction on that donation. Want to pass these savings back to the charity? All the merrier.

2. As an early step toward passing down wealth

If you’re thinking about your legacy, gifting stocks can be a valuable tool, as opposed to liquidating and paying capital gains taxes. As of 2022, the IRS allows you to gift up to $16,000 per year, per person — including stock. In 2023, that number increases to $17,000. Married individuals who file jointly can gift up to $16,000 each in 2022 and $17,00 in 2023, for a total of $32,000 or $34,000 to any single recipient.

This $16,000 limit in 2022 isn't bound by familial or marital ties. So technically, you could give $16,000 in stock to all of your children, grandchildren, in-laws, friends and neighbors each year. Couples who file jointly may also be able to take advantage of gift splitting by filing Form 709, which allows them to utilize the doubled gift limit even if only one spouse is contributing.

Internal Revenue Service. Instructions for Form 709 (2021). Accessed Sep 8, 2022.

» Learn more about gift taxes or estate planning.

NerdWallet rating 


NerdWallet rating 


NerdWallet rating 





per trade for online U.S. stocks and ETFs



per share; as low as $0.0005 with volume discounts



per trade

Account minimum 


Account minimum 


Account minimum 



Get $100

when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.



US resident opens a new IBKR Pro individual or joint account receives 0.25% rate reduction on margin loans. Tiers apply.


Get up to $600 or more

when you open and fund an E*TRADE account

3. Through a custodial account for your kids

One of the simplest ways to get your kids started in stocks is to set up a custodial brokerage account. You’ll be able to transfer existing shares of stock, mutual funds or other securities from your account to the custodial account, or buy specific securities directly within the custodial account. The child will take control of the account when they hit a certain age — typically 18 or 21, depending on the state.

Be wary of what the IRS calls the "kiddie tax," though. Once a child's unearned income hits $2,300, it can become taxable at the parent's tax rate.

For this reason, it may be favorable to select stocks that pay out little to no capital gains or interest.

If you're considering a custodial account for a child, it's also worth exploring Roth IRAs for kids. You can't transfer stocks as a gift like you can with a custodial account, and your child will need to have earned income to get started, but it's one way to avoid the kiddie tax issue (and the account grows tax-free).

4. As a virtual stocking stuffer for friends and family

All that’s required to transfer shares to an adult friend or family member is for the receiver to have a brokerage account. There are a few logistical hurdles — you’ll need their account information and a few more personal details to actually perform the transfer — but if a promissory message in a Christmas card is sufficiently exciting, gift away. If they don’t have an account, you could help open and fund one for them as part of the gift.

You can start the process online in your own brokerage account by opting to gift shares or securities you own; if you can’t find that option, contact your brokerage firm directly. If you want to gift a stock you don’t already own, you’ll have to purchase it in your account, then transfer it to the recipient.

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.