CSS Profile - capital gains or dividend income?

Paying for College
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S got into a wonderful school, his first choice, through early action. We are thrilled. This was largely due to College Confidential and all the fantastic advice we have rec’d over the years from posters with so much experience. We can never express enough how grateful we are for sharing all your words of wisdom! It was a joyous Christmas at our house this year.

Now that the euphoria has died down, we have started looking at practical details, like the financial aid package. We had filled out the CSS Profile in October for the first time (D’s school does not require it). Even though we did our best, there are some mistakes / things we missed. For example, listing our home’s assessment (not market value).

My question is in the title of the thread. We rec’d a gift of stock from in-laws for Christmas last year. While it was not by any means a large sum, we sold it right away to help with expenses. Now I am totally confused as to whether I put the amount on the right line. Is it a capital gain? Is it a dividend? Also, should I be putting the amount we got when we sold it? Or the difference between what my in-laws got it for and what we sold it for?

Again it was not a lot of money but we are trying to be as honest and thorough as possible and this has been really confusing. Thanks!!

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Gifts to parents are not reported on the PROFILE or FAFSA, I believe. However, though the fin aid process does not line up exactly with the federal tax process, the way verification is done is through the tax returns. So the receipt of the stock is not reported since it was a gift, but the capital gains realized as reported on your 1040 for 2014 is what will be used. I am up on tax law at all, so you need to talk to a accountant and read up on how the gains are calculated for you. This, http://www.schwab.com/public/schwab/resource_center/expert_insight/ask_carrie/taxes/how_do_you_value_a_gift_of_stock.html is a dated handling of a similar situation, but I would double check what the current laws are.

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When you receive a gift, you take the basis of the gift giver. So when you sell, the capital gain (not dividend) is calculated as the sale price minus the price that the gift giver originally paid for the asset. This would be reported as a capital gain on line 13 of IRS form 1040, but you would first have to complete form 8949 and/or schedule D.

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Thanks very much to both of you for your responses. Sorry to be so thick about this but we are not very expert (to put it mildly). Cptofthehouse thanks for the link. MiddKidd, we will look into the forms you mention.