Hi all,

I purchased the 200 shares of stocks at 40/share in 2011, and gifted to my nonresident relative when the market price is 50/share in Nov. 2013.

The relative then sold all 200 shares Oct. this year at 70/share. Is she subject to a capital gain tax? What would be the cost basis and would it be a long term or short term capital gain?

If this is the only income she has in the US, does she use this amount to compute her marginal bracket for the capital gain tax rate?

I know the dividend is taxed at 30% flat rate, but capital gain from price change got me really confused.


Thanks very much in advance!

Jeremy