How to Buy Stock as a Gift

Video Transcript

"Hi I'm Roger Groh with Groh Asset Management. We're here today to talk about how you buy stock when you intend to gift that stock to a charity or to a person, maybe you are setting up an educational fund, maybe you tend to just want to help a stranger or perhaps you are looking for tax deductions with a charitable deduction. O'kay how do you do it? Well first you have to buy the stock someplace. You can do it through your regular discount broker or you can buy it through your full service broker. After you purchase the stock you can then request a physical stock certificate and it's a piece of paper saying you own, you your name, owns one share, 1,000, whatever it is the number of shares, of this individual stock. On the back of that there is a form that you fill out that says I gift or I give these shares to X and then you just write in the name of the person that is involved. If you don't want to do it that way and you want to be safer there is a form that your stock broker can give to you that serves the same purpose but it is a little bit safer when it comes time to mailing these certificates back to the company in question because once you sign it that certificate is like cash. If those two pieces of paper are separate they have to meet at the end and that is safer for you. You can mail them in separate envelopes. If they get to the company separately they put them together and whammo you have a gift. There might be another way to do it. If you buy stock directly from a company in some cases they give you the right to gift those shares to whomever you want and the advantages that there is less paperwork, there is usually less cost and less headache. So I'm Roger Groh and that's a little bit about how you actually buy stock for the intent to use it as a gift. Thank you for spending a few minutes with me."