Quote:
|
It is "best" to gift them assets that have "appreciated".... so --- you bought McDonalds 10 years ago - it's up 300%.... rather than you selling some - and giving the "money" as a gift -- it's best to just transfer "13K" worth of the asset to them. You will not have the long term capital tax (15%) AND the receiver gets what is called the "stepped up cost basis" -- so their "gain" if any is from the date you transferred the asset. So let's say you bought at $100 - it's not worth $300.... the "kid" gets the stock and their "cost" for tax purposes is the $300. They can sell it the next day and have no tax liability... (if it stayed at $300). So you escaped taxes on your gain - and they have no gain so pay no taxes. Sweet!
|
Greg, it's against my better judgement to counter you on this but without having the time to research it (just on a quick lunch) I believe this only applies if the gifter dies. Otherwise the original cost basis is retained.
Otherwise, 2 people each could buy a stock and then just gift their purchase to the other once it had appreciated and pay no taxes as long as the gift was below the current annual limit. I wish they weren't, but the IRS is smarter than that.
Since you have brought up McDonalds's more than once I think it's interesting to note that they are much more a real estate company than a burger company. They buy prime real estate to put their restaurants on and then lease it back to the franchisee on top of their 8% (I think) franchise fee. How many times have you seen a McD's move a few hundred feet down the road just to be on the corner?
Just wanted to say too Greg what a great thing you are doing sharing all this information with everyone. I looked at the times of some of your posts yesterday and good lord man, did you even take time away for Christmas?
