All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 2
Registered: ‎12-15-2017

Colorado New Home Buyer Savings Account

Hi Community,

I'm interested in taking advantage of the Colorado First Time Home Buyer Savings Account - https://leg.colorado.gov/sites/default/files/documents/2016a/bills/2016A_1467_signed.pdf

 

I'm interested in funding the account with highly appreciated shares and was wondering how to value the contribution? According to the bill I've linked to I can contribute $28k. (but is this $28k my original basis or the current market price?)

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THE MAXIMUM CONTRIBUTION TO A FIRST-TIME HOME BUYER SAVINGSACCOUNTFORATAXABLEYEARISFOURTEENTIIOUSANDDOLLARS FORAN INDIVIDUAL AND TWENTY -EIGHTTIIOUSAND DOLLARS FOR ACCOUNT HOLDERS WHO FILE A JOINT RETURN;

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Since the savings account is established through filling a tax document (and the financial institution doesn't have to be aware that this is what the account is for) I assume I can use a standard brokerage account that accepts stock transfers.

 

As an argument that the contribution should be in my original basis I'd point out that a gift of stock has capital gains impact on the recipient with respect to the original basis.

 

As an argument that the contribution should be at the current market price I'd consider that gifts of stock have gift tax implications based on current value.

 

So what are your thoughts? Can I contribute $28k valuing the shares at the original purchase price, or valuing hem at the current market price.

Thanks for your thoughts,

Scott