Selling One Share Stock Certificates

by Julia Thomson ; Updated July 27, 2017
Selling a one-share stock certificate can be expensive and time-consuming.

Items you will need

  • Taxable brokerage account with reputable discount brokerage firm
  • One-share stock certificate that you wish to sell

Most people likely receive their one-share stock certificate as a gift from a well-meaning older relative, anxious to expose them to the importance of investing and the value of the stock market. However, selling one-share certificates is time-consuming and can cost more than the value of the share.

If the company represented by the stock certificate still trades, you can deposit the certificate into a brokerage account and sell the share. If the company no longer trades, you still might find a willing buyer among stock-certificate collectors, either on an auction site such as Ebay or through a business that specializes in stock certificates.

Step 1

Determine the actual owner of the stock certificate. A one-share stock certificate given to a child might be in the child's name or it might be in the name of the parent for the benefit of the child.

Step 2

Ask the person who gave the stock certificate what she paid for it in order to establish the share's cost basis. You will be taxed on any profit from the sale, but you can declare a loss if you sell the share for less than its cost.

Step 3

Open a taxable brokerage account whose registration, or legal name, matches the name on the stock certificate. If your minor child is the owner of the stock certificate, you will need to open a custodial account with yourself as the custodian and your child as the beneficiary.

Step 4

Ask the brokerage firm for instructions on how to endorse the stock certificate so that the share can be deposited into your account. You will also need to know where the certificate should be mailed or whether it can be delivered to a local office. Bear in mind that the local office must still mail the certificate to a special department for handling and you might want to keep control of that process.

Step 5

Use certified mail or another enhanced delivery service to have your certificate delivered to your brokerage account.

Step 6

Let your brokerage firm know what was paid for the share so that the account can reflect the correct cost basis. Once the share is sold, you will have documentation of the profit or loss for tax purposes.

Step 7

Set up a sell order for the share once the deposit has been credited to the account, assuming the share value is greater than the commission cost. If not, you can always leave the share untouched and see if it goes up in value.

Step 8

Arrange for a check for the sales proceeds. Most brokerage firms will hold the sales proceeds until the firm is able to validate the certificate with the company's transfer agent, so don't assume that you can get your check right away. The brokerage firm can let you know how soon you can withdraw funds from your account.

Step 9

Close the account or use the funds to do more investing. The brokerage firm will send you a Form 1099 for your tax return by February.

Tips

  • Some firms will offer to sell your certificate for you without you having to open a regular account. However, watch out for fees. This process could be a lot more expensive than the single share is worth.

Warnings

  • Most firms have funding minimums that you must meet before you can use the account. Once you've sold your share and your sales proceeds are released, however, you can close the account and withdraw any additional funding required by the brokerage firm.

    If you need to open a custodial account, bear in mind that any additional funding required to open the account becomes an irrevocable gift to the minor child, and the assets must be used for his or her benefit.

About the Author

Julia Thomson began writing professionally in 1996. Her work has appeared in "Stage Directions," "Phoenix New Times" and "The Valley Callboard." Thomson has expertise in investing and personal finance, with three brokers' licenses and certification as a budget counselor. She holds a Master of Music from Indiana University.

Photo Credits

  • bond of the state loan, russia, 1951 year image by air from Fotolia.com
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