Replies to post #9498 on Exobox Technologies Corp (EXBX)

[katuko]

The only tax burden would occur when the recipient sold their shares. Their cost basis would be the value at the time of the gift; i.e., .27 per share. However, the person giving the gift would have to file a gift tax return if over $12,000 and a it would take away a portion of their lifetime gift exemption of $1,000,000.

From another website for more detail:
http://www.schwab.com/public/schwab/research_strategies/market_insight/financial_goals/estate_planning/estate_tax_repeal_and_lifetime_gifting_the_impact_on_your_estate_plan.html?refid=P-1577265&refpid=P-1577471

How gifting works
Currently, you can give up to $12,000 each to any number of persons in a single year without incurring a taxable gift ($24,000 for spouses "splitting" gifts). In addition, you can make unlimited payments directly to medical providers or educational institutions on behalf of others without incurring a taxable gift.

If you make a gift of more than $12,000 to any one person during the course of the year, you have to report the taxable gift on a Gift Tax Return (IRS Form 709). Spouses splitting gifts must also file Form 709, even when no taxable gift is incurred.

For taxable gifts, each donor has an aggregate lifetime exemption of $1 million before any out-of-pocket gift tax is due. In other words, you can give away a total of $1 million during your lifetime—over and above the annual exclusion and any payments you make directly to educational or medical providers on behalf of another—and still avoid gift tax.

The lucky recipient of the gift owes no gift tax or income tax, and doesn’t even have to report the gift unless it came from a foreign source.

Lifetime gifting and estate planning
Typically, it's a great strategy to take advantage of the annual $12,000 exclusion, make payments directly to medical and educational providers on behalf of loved ones, and preserve your $1 million lifetime exemption.

However, for those with large estates, it often makes sense to also make taxable lifetime gifts utilizing the $1 million lifetime exemption—or even beyond if your net worth is very high.

Most advanced wealth-transfer strategies, including some we'll discuss next, minimize gift taxes by taking advantage of the annual exclusion, the lifetime exemption, and valuation discounts available under the law (a valuation discount means the gift is worth less than its apparent value for gift tax purposes).

Finally, before moving on to more sophisticated gifting strategies, here are a couple of caveats:

* Lifetime gifting can be a great strategy, as long as you leave yourself enough to live on. For the gift to count, it has to be irrevocable. You don’t want to give until it hurts, so be sure to plan carefully with the help of a professional.
* If the estate tax is repealed in the future, you may regret having paid gift tax now in an effort to minimize your estate tax. Again, you have to do the best you can based on what you know now, within the context of your goals.