Taxes on free stock

[skives]

Wife and I signed up for We Bull a couple years ago to earn free stock. We just sold what we had this past week. I had $180.21 and wife had $39.33. Some of that was a gain from the original price. So how do the taxes work on stock that is given for free from these brokerages?

[kork13]

I would expect it to be treated as having a cost basis of $0.00/sh ... Which means you'd be taxed on the full amount of the sale price.

That's probably the "worst case" (though also most likely). Other scenarios could exist, based on how your brokerage classified the shares upon issue. But the values here are pretty low, so I wouldn't worry too much about it in any case ... It's almost rounding error numbers here.

[disneysteve]

If your cost basis was $0 then the entire sale price would count as a capital gain. But you're only talking about maybe $33 in taxes.

[skives]

So if we held it more than a year and our taxable income is under $94k we wouldn’t owe any taxes right?

[disneysteve]

So if we held it more than a year and our taxable income is under $94k we wouldn’t owe any taxes right?

I'm not sure how that works since our income is over that but that could be the case.

[kork13]

So if we held it more than a year and our taxable income is under $94k we wouldn’t owe any taxes right?

Yes, is you're below the income limit to get 0% LTCG, then you'd likely have it tax free.