When is the valuation of gift shares determined for tax purposes?

Tax professional here. For stock gifts, the valuation date is the date the gift is considered "completed" for federal tax purposes, which generally means the date when you've relinquished control of the assets. For your situation specifically, the gift is complete when you've done everything required of you to transfer ownership. This typically means the date the properly executed transfer documents are delivered to the transfer agent (your brokerage), not when the transfer actually processes in their system. So if you mailed the documents on 1/2/25 (and they were properly completed and notarized), that's likely your valuation date. The subsequent market increase shouldn't affect your gift tax situation. The fact that the shares weren't actually moved into the recipients' accounts until later doesn't change the valuation date. However, if you had the ability to revoke or change the gift after mailing, the gift wouldn't be considered complete until that control was relinquished.

I went through something similar last year with gifting Apple shares to my kids. After researching it like crazy, I found this amazing tool called taxr.ai (https://taxr.ai) that analyzed all my documents and gave me the exact date to use for valuation purposes. It confirmed what I suspected - the date of transfer (when I submitted the paperwork) was what mattered, not when everything finished processing. The tool even provided specific IRS references backing this up. Saved me a ton of stress because the shares jumped like 15% right after my transfer! They have this document analyzer feature where you upload your transfer forms and it tells you exactly what date to use for tax purposes. Super helpful for these tricky gift tax situations.

Just wanted to update about my experience with taxr.ai that was mentioned above. I was skeptical but decided to try it since I was in a similar situation with those Microsoft shares I mentioned. I uploaded my transfer docs and it immediately identified that I should use December 28th as my valuation date, even though the transfer didn't complete until January. It even explained exactly why - because I had relinquished control when I submitted the irrevocable transfer request. This saved me from having to file Form 709 gift tax return since the December 28th valuation kept me under the annual exclusion. The site even generated a document explaining the valuation date determination that I can keep with my tax records in case of audit. Definitely worth checking out if you're in a similar situation with gift valuations.

I dealt with this exact problem last year and spent HOURS on hold trying to get someone at the IRS to confirm the valuation date rules. After multiple failed attempts and disconnections, I found Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in about 20 minutes. The agent confirmed that for stock gifts, it's the date you deliver the completed transfer documents to the transfer agent (your broker). So if you mailed it on 1/2, that's your date as long as you completed everything properly. Check out their demo video if you're struggling to reach the IRS directly: https://youtu.be/_kiP6q8DX5c They basically call the IRS for you, navigate the phone tree, wait on hold, and then call you when they have an agent on the line. Saved me hours of frustration and I got an official answer I could rely on.

I need to apologize for being so skeptical about Claimyr in my comment above. After continuing to struggle with getting through to the IRS about a separate tax issue, I decided to try it. To my genuine surprise, they got me connected to an IRS agent in about 25 minutes. I had previously spent nearly 3 hours across two days trying to get through myself. The agent I spoke with confirmed the exact gift valuation information others have mentioned - it's the date you mail the properly completed transfer documents, not when the shares actually move between accounts. They also explained that if you're close to the annual exclusion limit, you should document the stock's closing price on your mailing date and keep that with your tax records, along with proof of mailing date (like a tracking number).

Something important that hasn't been mentioned yet - if you're married, you and your spouse can elect to "split" the gift for tax purposes, which doubles your annual exclusion to $38,000 per recipient for 2025 (even if the gift is only coming from your separate property). But - and this is important - you MUST file Form 709 (Gift Tax Return) to make this election, even if you're under the annual exclusion amount. A lot of people miss this requirement.

For the original question - I was in literally the exact same situation last year. The shares I was gifting jumped 12% between when I mailed the forms and when the transfer completed. My tax advisor confirmed that the date of valuation was when I mailed the fully completed forms (I had them notarized too). I kept the overnight shipping receipt as proof of the date. One tip: get a written acknowledgment from your broker when they receive the documents. I had my broker email me confirmation of receipt, which provided another piece of documentation showing when I had officially relinquished control of the shares.

This is a great discussion and really helpful for understanding gift tax valuation timing. I'm dealing with a similar situation where I'm planning to gift some ETF shares to my son, but I'm wondering about one additional wrinkle - what happens if the shares are in a taxable brokerage account that requires a medallion signature guarantee instead of just notarization? My broker is telling me I need to go to a bank or credit union to get this medallion guarantee, and they're saying it might take a few days to process once I submit everything. Does the valuation date become when I get the medallion guarantee, when I submit the completed forms to my broker, or when the broker actually processes the transfer? I'm trying to time this around some earnings announcements that might move the stock price significantly, so getting the valuation date right is crucial for staying under the annual exclusion limit.

This thread has been incredibly helpful! I'm a CPA and wanted to add one important point that hasn't been fully addressed - documentation is absolutely critical for gift tax valuation dates, especially when market volatility is involved. Beyond just keeping your mailing receipt or broker confirmation, I always advise clients to create a simple written record that includes: (1) the exact date you mailed/delivered the transfer documents, (2) the stock's closing price on that date, (3) the exact number of shares being gifted, and (4) the calculated total value. Print out the stock quote from that date and staple it to your records. This becomes especially important if the IRS ever questions your valuation date during an audit. Having contemporaneous documentation showing you calculated the gift value based on the date you relinquished control (rather than trying to reconstruct it later) provides much stronger support for your position. Also, for anyone getting close to the annual exclusion limits, consider making the gift earlier in December rather than late in the year. This gives you more flexibility if market movements put you over the limit - you'd still have time to make additional planning moves before year-end if needed.