How to Transfer Stocks to Another Person or Account

A stock transfer involves moving the ownership of shares from one party or account to another. This process is common for various reasons, whether an individual is changing brokerage firms, gifting assets, or managing an inheritance. Understanding the different pathways available for these transfers can help ensure a smooth transition of ownership.

Common Methods of Transferring Stocks

Transferring stocks can occur through several distinct methods, each suited for different circumstances. One common approach is a brokerage-to-brokerage transfer, often facilitated by the Automated Customer Account Transfer Service (ACATS). This system allows for the electronic movement of securities from one brokerage firm to another while maintaining the same ownership.

For stocks held as physical certificates, the transfer process involves a tangible document. These paper certificates must be endorsed by the registered owner and re-registered in the new owner’s name.

Gifts and inheritances also involve stock transfers, moving shares between individuals, or from an estate or trust to a beneficiary. The Direct Registration System (DRS) offers an electronic alternative to physical certificates, holding shares directly with the issuing company’s transfer agent in book-entry form.

Gathering Necessary Information and Documents

Before initiating any stock transfer, gathering specific information and documentation is an important preparatory step. Fundamental details required for nearly any transfer include the full legal names and addresses of both the sending and receiving parties, along with their respective account numbers. Accurate identification of the securities, including the company name, ticker symbol, and the precise number of shares to be transferred, is also necessary.

For a brokerage-to-brokerage transfer using ACATS, the receiving brokerage typically initiates the process by providing a Transfer Initiation Form (TIF) or a similar ACATS form. This form will require specific details such as the account number at the delivering firm, the account type (e.g., individual, joint, trust), and sometimes a recent statement from the sending account to verify holdings. You can usually obtain this form directly from the website or customer service of the receiving brokerage.

For gifting or inheriting shares, specific forms are required, which vary by institution. A Letter of Instruction or Transfer Request Form is common for gifts, needing donor and recipient details, their relationship, and security specifics. Inherited stocks often require a certified death certificate, legal documents like Letters Testamentary or Administration, or a trust document. A small estate affidavit may be accepted for smaller estates.

If stocks are physical certificates, the original must be endorsed by the registered owner. A Medallion Signature Guarantee is often required for physical certificate, gift, or inheritance transfers to verify signature authenticity and prevent fraud. This guarantee is obtained from a financial institution that is a member of a recognized Medallion Signature Guarantee Program. Additional documentation, such as government-issued identification or trust agreements, may also be requested.

Executing the Stock Transfer Process

Once all necessary information has been gathered and the appropriate forms are accurately completed, the next phase involves executing the transfer. For ACATS transfers, the receiving brokerage firm typically handles the submission of the completed ACATS form and any supporting documents. This submission can often be done through their online portal, or by mail. After the receiving firm initiates the electronic request, the delivering firm will respond, and the process generally takes about 3 to 10 business days for full or partial transfers.

For gifts or inherited shares, the specific brokerage forms and supporting documents are submitted directly to the brokerage or the transfer agent. This submission usually involves mailing physical documents to a designated address, often via secure, trackable mail, or utilizing secure online upload portals provided by the financial institution. Physical stock certificates, once endorsed and accompanied by any required transfer forms, are also mailed to the transfer agent or brokerage. It is advisable to use secure, trackable delivery services for original certificates due to their tangible nature.

A Medallion Signature Guarantee, when required, is a procedural step performed after forms are filled out but before submission. You must physically take the signed documents to an eligible financial institution where you are a customer, such as a bank, credit union, or brokerage firm, to obtain this stamp. This process verifies the authenticity of the signature and the signer’s legal authority to complete the transaction.

After submission, expect confirmation of receipt. ACATS transfers are generally faster, but transfers involving physical certificates, gifts, or inheritances can take several weeks due to manual processing and document verification. Financial institutions may request additional information. Many firms offer online portals or customer service channels to track transfer status.

Understanding Tax Considerations for Stock Transfers

Stock transfers can have various tax implications depending on the nature of the transaction. If a stock transfer is essentially a sale or redemption, capital gains tax generally applies. This tax is calculated based on the difference between the sale price and the cost basis (the original purchase price adjusted for commissions or other fees), with the rate depending on the holding period (short-term for assets held one year or less, long-term for assets held longer).

For gifted stocks, the donor is responsible for any gift tax, not the recipient. The IRS provides an annual gift tax exclusion, which for 2025 is $19,000 per recipient. Gifts up to this amount do not incur gift tax or require reporting.

If a gift exceeds this exclusion, the donor must file IRS Form 709. Exceeding the annual exclusion does not automatically result in gift tax due, as individuals have a lifetime gift tax exemption, which for 2025 is $13.99 million. Any amount exceeding the annual exclusion reduces this lifetime exemption.

Inherited stocks benefit from “stepped-up basis,” resetting the cost basis to the fair market value on the original owner’s death date. This adjustment can significantly reduce or eliminate capital gains tax for the inheritor if they sell the asset soon after inheriting it. Conversely, transferring stocks between accounts owned by the same individual, like moving shares between brokerage accounts under the same name, does not trigger a taxable event as there is no change in ownership.