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January 17, 2025
Question

I received 36 shares from Wells Fargo for working there for 3 yrs. Are those a gift or inheritance?

  • January 17, 2025
  • 1 reply
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    1 reply

    January 20, 2025

    Neither.  If they came from an employer, they are considered income from that employer and not a gift or inheritance.  In general, employers cannot give gifts of real value to employees without it creating a taxable event. How and when the stock is taxed depends on when you sell the stock and how it was given.

    If it was given as an Incentive Stock Option, then it would not be taxed until you sold it, meaning you only include it on your return in the year that you sell it. 

    If it was not given as part of an Incentive Stock Option or as part of an employee stock option purchase plan, then it would be included as taxable income if the Fair Market Value is readily determined.  Since this is Wells Fargo stock, it is actively traded which means the value is readily determined and would be included on your return in the year you received the stock.  This amount should be included on your W2 as part of your taxable income in box 1. If you did not sell it, you would not have any special entries to make in the stock sales section.

    In either situation in the year you sell them, when you are entering it in TurboTax you will select Options, when you are asked "What type of investment did you sell"  

    How to Report Stock Options
    Stock Options

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