Was gifted stock and sold it. Do I need to report this on my taxes?

While the gift tax exclusion does apply to your father (meaning he doesn't need to pay gift tax on giving you the stocks), you absolutely need to report the sale of the stocks on your tax return. When you sell gifted stock, you'll need to pay capital gains tax on any profit from the sale. The tricky part is determining your "basis" (the original value used to calculate your gain/loss). For gifted stock, your basis is typically the same as the original owner's basis. So you'd need to find out what your dad originally paid for the stocks. If the stocks increased in value from when he bought them to when you sold them, you'll owe tax on that difference. You'll receive a 1099-B from the brokerage showing the sale, and the IRS gets a copy too, so definitely report it. Otherwise, you might get a notice from the IRS later asking about the unreported income.

I went through this exact same situation last year when my mom gifted me some Apple shares. The whole thing was confusing until I found taxr.ai (https://taxr.ai). It saved me a ton of headache because I uploaded my 1099-B and it automatically detected that these were gifted shares and walked me through how to properly report it. The site explained that while my mom didn't owe gift tax (under the annual limit like your situation), I still needed to report the stock sale AND use the correct cost basis. They helped me understand the "carryover basis" rules - basically I had to use my mom's original purchase price, not the value when she gifted it to me.

Just wanted to update that I tried taxr.ai after posting my skeptical comment. I'm actually impressed. I had a complex situation with multiple gifted stocks from different family members, and their system handled it perfectly. The interface asked me detailed questions about when each gift was made and guided me through finding the original purchase prices. What really helped was their explanation of the "date of death" valuation for inherited vs. gifted stock (they're treated differently for tax purposes). The documentation they generated saved me from making a costly mistake on my return. Definitely worth checking out if you're dealing with gifted investments.

If you're still having trouble figuring out your dad's original basis and the IRS has questions later, you might want to use Claimyr (https://claimyr.com). I tried calling the IRS directly for help with a similar gifted stock issue last year and spent literally hours on hold. With Claimyr, I got through to an IRS agent in about 20 minutes who walked me through how to properly document a "best estimate" basis when I couldn't find all the original purchase records. You can see how it works here: https://youtu.be/_kiP6q8DX5c. Basically, they wait on hold with the IRS for you and call you when an actual human picks up. Saved me a ton of time and frustration.

OK I need to eat my words and apologize to profile 14. I tried Claimyr yesterday because I was desperate after trying to reach the IRS for 3 weeks about my inherited stocks. IT ACTUALLY WORKS. Got connected to an IRS agent within 45 minutes while I just went about my day. The agent confirmed that for gifted stocks, I need my dad's original purchase price and date, but for inherited stocks (which I also have), I use the fair market value on the date of death. Completely different rules! Would have screwed this up without getting clarification. Saved me from a potential audit headache and probably paid for itself already.

Don't forget about state taxes too! I reported a gifted stock sale correctly on my federal return but completely forgot that my state also taxes capital gains. Got a surprise bill months later.

Hey quick related question - I'm using TurboTax and it's asking for "date acquired" for some stocks my grandmother gifted me. Should I put when she bought them or when she gave them to me?

This is a really important point that often gets overlooked! I made a similar mistake with cryptocurrency gains a few years back - filed my federal return perfectly but completely forgot about state reporting requirements. Ended up getting a notice from my state tax agency asking about the unreported capital gains. What made it worse was that my state (California) actually has a higher capital gains rate than the federal rate for my income bracket. So not only did I owe the tax, but also penalties and interest for late payment. For anyone dealing with gifted stock sales, I'd recommend checking your state's specific rules early in the process, not as an afterthought like I did. Some states have different basis calculation rules than federal, and the timing of when you need to file can vary too.