[{"@context":"https:\/\/schema.org\/","@type":"Article","@id":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/are-free-stocks-taxable\/#Article","mainEntityOfPage":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/are-free-stocks-taxable\/","headline":"Are Free Stocks Taxable?","name":"Are Free Stocks Taxable?","description":"On my YouTube channel, I got a question from Fighting Ducks who asked me:...","datePublished":"2021-10-11","dateModified":"2022-08-16","author":{"@type":"Person","@id":"https:\/\/moneydoneright.com\/author\/logan-allec\/#Person","name":"Logan Allec, CPA","url":"https:\/\/moneydoneright.com\/author\/logan-allec\/","identifier":4,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Money Done Right","logo":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","width":488,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/are-free-stocks-taxable.jpg","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/are-free-stocks-taxable.jpg","height":460,"width":1900},"url":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/are-free-stocks-taxable\/","video":{"@context":"http:\/\/schema.org\/","@type":"VideoObject","@id":"https:\/\/www.youtube.com\/watch?v=966QWhh7EO8#VideoObject","contentUrl":"https:\/\/www.youtube.com\/watch?v=966QWhh7EO8","name":"Are Webull Free Stocks Taxable?","description":"Recently, I got a question from a viewer asking if the free stocks they received from Webull need to be reported on their taxes. So in this video, I'll be going over Webull's free stock program and how to report free stocks on your taxes, so make sure you watch the full video to find out if they're taxable and what you should do if you've claimed any free stocks!\n\n\u27a1\ufe0f My Webull Free Stock Link: https:\/\/moneydoneright.com\/webull\n\nCool Stuff:\n\ud83c\udfe1 Free Mortgage Refi Rates: https:\/\/moneydoneright.com\/credit-karma-home-mortgage\/\n\u26b0\ufe0f Free Life Insurance Quotes: https:\/\/moneydoneright.com\/quotacy-life\/\n\ud83d\udcb5 Free Personal Loan Quotes: https:\/\/moneydoneright.com\/fiona\n\u26fd Get Cash Back on Gas: http:\/\/go.moneydoneright.com\/getupside\n\ud83d\udcbb Get Cash Back on Online Shopping: https:\/\/moneydoneright.com\/rakuten\/\n\ud83d\uded2 Get Cash Back on Groceries: https:\/\/moneydoneright.com\/ibotta\n\nVideos:\n\ud83d\udcc8 11 Places to Get Free Stocks: https:\/\/youtu.be\/g2PNE74eyks\n\ud83d\ude80 Review of My Favorite Stock Broker: https:\/\/youtu.be\/XNMhp9xeNq8\n\ud83d\udcbb My TurboTax Review 2021: https:\/\/youtu.be\/bx_G-jzAhhk\n\ud83d\udce6 7 Ways to Get Free Stuff: https:\/\/youtu.be\/o7CaiOPMhhA\n\ud83d\udcb0 Free Millionaire Math Webinar: https:\/\/loganallec.com\/\n\ud83d\udc6a Our Family Vlog: https:\/\/youtube.com\/TheAllecFamily\n\nPrograms (Use Coupon Code YOUTUBE for 50% Off!)\n\ud83c\udf93 The Money Course (Paid): https:\/\/www.loganeducation.com\/offers\/FUmjEuPB\/checkout\n\nTable of Contents:\n0:00 Are Webull Free Stocks Taxable?\n0:50 What Amount Should You Include As Income?\n2:41 Where to Report Webull Free Stock on Your Tax Return\n4:29 Webull and the $600 Form 1099-MISC Threshold\n5:13 Other Goodies\n\nAdvertiser Disclosure:\nThis video may contain links through which we are compensated when you click on or are approved for offers. The information in this video was not provided by any of the companies mentioned, and has not been reviewed, approved, or otherwise endorsed by any of these entities.\n\n#webull #stocks #investing","thumbnailUrl":["https:\/\/i.ytimg.com\/vi\/966QWhh7EO8\/default.jpg","https:\/\/i.ytimg.com\/vi\/966QWhh7EO8\/mqdefault.jpg","https:\/\/i.ytimg.com\/vi\/966QWhh7EO8\/hqdefault.jpg","https:\/\/i.ytimg.com\/vi\/966QWhh7EO8\/sddefault.jpg","https:\/\/i.ytimg.com\/vi\/966QWhh7EO8\/maxresdefault.jpg"],"uploadDate":"2021-03-20T16:00:02+00:00","duration":"PT6M5S","embedUrl":"https:\/\/www.youtube.com\/embed\/966QWhh7EO8","publisher":{"@type":"Organization","@id":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA#Organization","url":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA","name":"Logan Allec","description":"Logan Allec is a CPA and the founder of Choice Tax Relief, which specializes in helping people with their IRS and state tax debt.","logo":{"url":"https:\/\/yt3.ggpht.com\/43_VKqrbO06RGMcxfdQbDXosrkVRq1yf5QgSQEiR4ILUGWV9fJtTh0o2ftYMYqVo6PwnEOPRdg=s800-c-k-c0x00ffffff-no-rj","width":800,"height":800,"@type":"ImageObject","@id":"https:\/\/www.youtube.com\/watch?v=966QWhh7EO8#VideoObject_publisher_logo_ImageObject"}},"potentialAction":{"@type":"SeekToAction","@id":"https:\/\/www.youtube.com\/watch?v=966QWhh7EO8#VideoObject_potentialAction","target":"https:\/\/www.youtube.com\/watch?v=966QWhh7EO8&t={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"},"interactionStatistic":[[{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=966QWhh7EO8#VideoObject_interactionStatistic_WatchAction","interactionType":{"@type":"WatchAction"},"userInteractionCount":2775}],{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=966QWhh7EO8#VideoObject_interactionStatistic_LikeAction","interactionType":{"@type":"LikeAction"},"userInteractionCount":159}]},"about":["Personal Taxes"],"wordCount":1007,"keywords":["schema"],"articleBody":"On my YouTube channel, I got a question from Fighting Ducks who asked me:\u201cLogan, I have one of those free stocks that was given for signing up to use an app. It is less than $5. Do I need to claim that on my taxes?\u201dOf course, since I wrote an article covering all the places you can get free stocks right now — and no, it’s not just Webull and Robinhood — I knew exactly what he was talking about.Table of ContentsToggleAre Free Stocks Taxable?How Much Should I Report on My Tax Return?Where Should I Report Free Stocks on My Tax Return?What About When I Sell My Free Stocks?Will I Receive a Form 1099 For My Free Stocks?Are Free Stocks Taxable?Well, the answer to Fighting Duck\u2019s question is yes, you need to report the value of free stocks you received on your tax return as it is taxable income for you.How Much Should I Report on My Tax Return?So how do you know the amount of income from free stocks you should report on your tax return?Well, the answer is the closing price of the stock on the day that your stock was actually delivered to your account.Now, determining this amount can be a bit confusing.For example, if you received free stock from Webull, the value you should report is\u00a0not the estimated value that Webull tells you in the \u201cMy Free Stock\u201d section of your account.In this section, Webull simply tells you the estimated value of the stock you will receive from them before you actually receive it.This is not the actual value of the stock when it was delivered to you; rather, this appears to be merely the value of the stock at the time you claimed your free stock in the Webull app, which was obviously before the stock is actually delivered to you.However, if you download your tax document for the year — which you can do by logging into your Webull account, clicking the account button at the bottom, entering your trading password, clicking more, then scrolling down to under \u201cDocument\u201d, clicking\u201cTax Document\u201d, and opening your tax document for last year — you can scroll down to the page that says \u201cMiscellaneous Income – Details of Form 1099-Miscellaneous\u201d.This form is basically a listing of your free stocks from Webull.And so the sum you see at the bottom for Other Income (Box 3) as well as any amounts you have in Box 8 — are the amounts to include on your tax return.If you’d like to see exactly what I’m talking about and how to find this information in Webull specifically, check out my video about reporting Webull free stocks on your taxes.Where Should I Report Free Stocks on My Tax Return?Where you report your free stock income on your tax return depends on whether or not your free stock income was earned in the course of a trade or business you own.Two Different Kinds of Free Stock RecipientsConsider these two types of individuals who earn free stock from online brokerages:Graham is a personal finance influencer.\u00a0 He routinely promotes Webull and other free stock opportunities in his YouTube videos and social media posts.\u00a0 He has earned hundreds of thousands of dollars’ worth of free stocks promoting Webull and other free stock opportunities.Wojak is some guy that watches Graham on YouTube.\u00a0 He used Graham’s Webull link and received a free stock from opening his account and making an initial deposit.\u00a0 He also received a few free stocks from referring a few friends to Webull.Graham was clearly receiving free stocks as part of his trade or business as a personal finance influencer, so he would report his free stock income on a\u00a0business tax form.\u00a0 Assuming he doesn’t have a separate business entity (such as an S corporation) set up, he would report his free stock income on Schedule C, Part 1, Line 1 (gross receipts or sales from business) along with the other business receipts and sales he generated from his influencer business.Wojak, however, did not receive his free stocks in connection with a business he runs, so he would simply report his free stock income as other income on\u00a0Form 1040, Schedule 1, Part 1, Line 8.Now, what if Wojak\u00a0also creates a YouTube channel and starts promoting free stock opportunities on his channel?In this case, I don\u2019t think it would be too aggressive for him to put the few stocks you received for signing up for Webull as \u201cOther Income\u201d that flows to Form 1040, Line 8, and the amount he received as referral bonuses from his YouTube channel on his Schedule C.Why It MattersWhere you report your free stock income matters because the amount reported as \u201cOther Income\u201d that flows directly to Form 1040, Line 8 is not subject to self-employment tax, but amounts reported on Schedule C are because they\u2019re part of your self-employment income.What About When I Sell My Free Stocks?When you sell your stock, your taxable gain is the difference between the amount you sell it for — your proceeds — and the amount you already reported as income upon receiving the free stock — your cost basis.Will I Receive a Form 1099 For My Free Stocks?Now, these online brokerages are technically only required to file a Form 1099 like this if they paid you at least $600 worth of free stock from them.However, Webull confirmed to me in an email that even if your referrals are less than $600, they will still report it to you on the Form 1099-MISC.I’m not sure how other brokerages work in terms of sending users a Form 1099-MISC for free stocks even if they don’t hit the $600 threshold, but let me know in the comments below if you have any experience with other brokerages giving away free stocks!And of course, be sure to check out my article on all the ways to get free stocks right now."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Taxes","item":"https:\/\/moneydoneright.com\/taxes\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Personal Taxes","item":"https:\/\/moneydoneright.com\/taxes\/\/personal-taxes\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"Are Free Stocks Taxable?","item":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/are-free-stocks-taxable\/#breadcrumbitem"}]}]