I have a custodial account at a brokerage firm for one of my kids. One of the positions is stock that was transferred from a relative. The cost basis still shows the original owners cost basis. The current market value is about 3X the original cost basis.
My question - if I decide to sell part of these shares, will there be capital gains type taxes based on the original cost basis? Or what should I know before I sell part of these shares to reinvest in something else?