Gifting

Let’s consider nontaxable and nondeductible giving to friends and family. Every year, you can give up to $15,000 to whomever you want and to as many people as you want. The recipient pays no tax on the gift and you receive no deduction. If you give someone stock, they take over the gains that you had in the stock. When they eventually sell it, they pay the capital gains tax at their rate. If you give more than $15,000, you simply need to file a gift tax return. The gift tax return means that you eat up some of the $11.4 million dollar exclusion that the government gives you before estate taxes kick in (if you’re married, the number is $22.8 million). Those are the facts, but what else is there to consider? First, all gifts to family and friends create an imbalance of power. This is not good or bad, it just is. Some people handle this better than others. So, while the gift is often greatly appreciated, it can also be confusing and affect the nature of the relationship.
If you want more information on gifting call 320-679-5183.
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