Q: I received shares of Prudential stock a few years ago because I had converted a group policy to a personal policy. If I sell the shares now, do I have to pay tax on the full value, even though I still own the insurance policy? A.P., Santa Clara, Calif.
A: Yes. That stock has nothing to do with your current policy. When Prudential went public in 2001, it granted stock shares to policyholders who were giving up voting rights in the company. Assuming you received your shares in that transaction, your cost basis is zero. So when you sell the Prudential stock shares, your full gain will be taxed as capital gain. Remember, long-term gains are now taxed at a maximum 15 percent rate.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/22865/tax-basis-on-prudential-stock-giveaway "