T-Mobile's Stock Giveaway

T-Mobile recently announced that it would reward customer referrals with a share of the company's stock. When a customer refers a friend who joins the company's network, T-Mobile will credit the customer's account in the amount of the stock price at the time, and for subsequent referrals, it will give the customer a share of the company's stock. T-Mobile will not issue new shares for the stock awards, but will purchase its shares on the open market. Of course, Uncle Sam will benefit as well. While the billing credit is not taxable, the shares of stock awarded will have to be listed as taxable income by the recipients. And when the stock is later sold, taxes will have to be paid on any capital gains above the original price.