How To Sell Stocks to a Spouse

Selling stock to a spouse has a different tax consideration than inheriting the stock from your spouse. When you inherit the stock, you receive it at the cost basis on the date of death. When you sell the stock, the cost basis your spouse paid is for the equity is retained. Selling stock to a spouse may happen for estate planning purposes or in the event of a divorce.

Instructions

1. Call your existing stock broker and request to sell stock to your spouse. You will receive a letter of instruction and a transfer form. The letter of instruction will need to state how many shares of what stock are being sold and for what price as well as the original cost basis you paid for the stock.

2. Open a new brokerage account for your spouse if she doesn't already have one. Deposit funds in the brokerage account that will cover the cost of the stock purchase.

3. Fill out the letter of instruction and transfer form listing your spouse's brokerage account number. Get the letter of instruction signature guaranteed---this can be done at a bank or brokerage firm with proof of identity.

4. Submit the forms to the brokerage firm that houses your stock.

5. Await the transfer of the stock in exchange for the cash by the brokerage firm.

6. Have your spouse retain a copy of the paperwork. This information will be used when the stock is sold to file capital gains.

References

• SEC: Holding Securities
• Fairmark: Stock Received from Spouse
• Divorce Net: Tax Consequence