Gift-based deductions
Under the new tax law an individual is allowed up to $11.4 million in gift and estate tax exemptions and double that for a couple. That is a massive amount, yet for some this is a good year to consider gifting assets that you eventually planned to give away, including property.
You can gift $15,000 a year to anyone without affecting this exemption amount, so if your estate is large it might be worthwhile to begin disbursing cash, stock and possessions early and often.
However, consider the impact on the receiver. If they decide to sell your gift of stock upon receiving it, they could be subject to capital gains taxes. On the other hand, if they receive stock as an inheritance on your death they should be able to get a “step up” in basis cost, erasing the tax burden.
Before you make a decision, it is best to check with your accountant and your lawyer so both you and the receiver benefit from your choices.
