My mother gave me a gift of about $30,000 in stock a little less than a year ago. (Sidenote: she wants me to use it to renovate and expand our home, but I want to use it to pay off debt. Tell me I'm right!)
You're probably right. Unless your house is too small to the point where it is interfering with your ability to live a happy life, paying off debt is the smart decision, especially when the rates are relatively high as is the case with your debt.
My DH and I have major student loan debt. Mine will be forgiven in seven years thanks to PSLF (yay!). He has significant debt at 6.8%. So... I know I should hold onto the stock for a year, right?
Not necessarily. If your mother paid less for the stock than it was worth when she gave it to you, you will use
her cost basis and purchase date when calculating the tax due on the sale. The amount of time you personally held the stock doesn't matter in this case; wait until at least a year after she bought it for long-term gains treatment.
Even if you don't have a long-term gain, consider whether the tax you will save by waiting will make up for the extra loan interest during that time. Depending on how much of a gain we're talking about here, paying short-term capital gains tax may be the better option.
