Gifting stock is when one person buys shares of a publicly traded company and subsequently transfers ownership to someone else. It's a great idea for two reasons: First, stock returns can compound and turn a small gift into a much larger gift over a long time period. Second, those on the receiving end could become interested in finance and ultimately learn how to invest for themselves. Here's how you can buy and gift stock.

Can you gift stock?
You're allowed to give stocks that you own to others. In many cases, any number of shares can be digitally transferred from an owner to a recipient if both parties have a brokerage account.
Can you buy stock for someone else?
Besides gifting stock you already own, you can also buy a new stock and then transfer ownership to someone else. This is usually accomplished with a transfer authorization form. If the recipient's account is at a different brokerage than your own, get in touch with the receiving institution to see what it requires.
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How to gift stocks
There's not a universal step-by-step process for gifting stocks -- it varies depending on who the recipient is and what particular brokerages require. But generally speaking, investors need the account information for the person or organization that will be receiving the gift. Then they need to follow the transfer policies of their own brokerage as well as satisfy the requirements for the receiving brokerage, if it's different.
Benefits of gifting stock
- Gifting stock gets others, including young children, interested in saving and investing.
- Stocks are a great long-term gift in lieu of cash if the recipient doesn't have a current need for the money.
- Gifting stock is a tax-efficient way to start transferring wealth to a beneficiary.
- Donating stock to charity could qualify for tax deductions.
Gifting stock to your beneficiaries, rather than selling the stock and gifting cash, could be tax-efficient for both of you. For example, if you own stock with long-term capital gains, the tax owed on earnings in an eventual sale could be as high as 20%.
If your beneficiary is in a lower tax bracket, their tax liability (if they sell the stock rather than keep it invested) would be lower. They could even have zero tax liability if they file their taxes as single and make less than $48,350 a year in taxable income (or less than $96,700 if married filing jointly), as of tax year 2025.
Do you pay taxes on gifted stock?
Any taxes you would normally owe when selling a stock don't apply if you decide to gift it instead. If there are any capital gains on stock you transfer to someone, that capital gain will transfer to the recipient.
Additionally, gifting stock to charities could come with a tax deduction if you itemize your tax return (rather than take a standard deduction). You'll want to check with your tax advisor on any limitations and how much of a deduction you qualify for. Moreover, the charity may need to provide paperwork acknowledging the value. But because charities are tax-exempt, gifting stock (versus selling it yourself, paying the tax, and then giving cash) could maximize what you're able to contribute toward their cause.
Limitations of gifting stock
There's a limitation to consider when gifting stock. The IRS requires you to fill out a gift tax return if you give more than $19,000 per year of cash or property to any recipient as of tax year 2025. If you're married, each spouse is allowed to gift $19,000 per recipient. In other words, gifting $38,000 combined to any one individual is allowed.
There is no limit to how many individuals you can gift, but bear in mind that the $19,000 limit applies to each person to whom you give stock. Any value given over that amount counts against what's called your lifetime gift exclusion, which is $13.99 million per person for tax year 2025. As long as your excess gifts above $19,000 per year don't exceed $13.99 million in your lifetime, you don't have to worry about owing gift taxes.
Generally, there's no tax deduction for gifting cash or stock to individuals, like there is when donating to charity.
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How to choose which stocks to gift
When you decide which stocks to give, start with those that have the most capital gains if you're also looking to limit your own future tax liability.
If taxes aren't a concern when picking stocks from your portfolio (or you're planning to buy and then gift), here are a few ideas:
- For kids, choose a company that the child likes to help get them engaged with finances in a positive way.
- Choose quality companies with good competitive advantages. The last thing you want is to gift your friend or family member something that eventually could be worthless.
- Choose companies that have good growth potential in hopes that the stock will become more valuable long-term, maximizing the value of your gift over time.
Gifting stock -- to loved ones for a special occasions to children as a way to build their appreciation for saving and investing, or as part of a tax strategy -- can be a better way to help others accomplish their financial goals compared to giving cash. And, because stocks have the potential to grow, they could be a gift that keeps on giving for a long time.