Yes, it is, when done correctly. As long as you follow the IRS guidelines, shifting income is allowable. Gifting appreciated assets to a child in a lower tax bracket is also a great way to fund a college savings account as long as those appreciated assets do not generate unearned income of more than $2,100 each year.
Can I pay for college with stocks?
You must pay the qualified expenses. If you gave stock to your child, and he sold the stock to pay for his college, you cannot take the tax deduction since you are not the one who paid for the qualified expenses. Your child cannot claim the deduction since he can be claimed as a dependent on your income tax return.
What are the tax rules for giving stocks to a grandchild?
It means you have to file the gift tax form, which is Form 709, and that just eats into your lifetime unified gift estate exemption, which is $11.4 million per person. Am I getting this right? I always have to look at Megan to make sure I get all this right. Basically it just lowers that.
Do you have to pay taxes on a stock gift?
When it comes to giving stock, possible capital gains taxes for both the giver and the receiver should factor into the decision. While gift taxes aren’t an issue for most givers, annual gift tax exclusion rules do apply to both stock and cash.
Do you have to pay tax on gifts to grandchildren?
Several methods of giving to grandchildren do not cause grandparents to incur tax liabilities. As of 2012, the Internal Revenue Service imposes a gift tax on monetary and non-monetary gifts in excess of $13,000 to any one recipient.
Can you give stock as a gift to your daughter?
On the other hand, if the value of the stock has gone down, it might make more sense to sell the stock, realize a capital loss for yourself, and then gift the cash to your daughter. What are the possible tax consequences for your daughter?
