Lifetime exemption gift (anyone done?)

[wanaberetiree]

Hello all

The more I live the more it feels that you really need money when you are young. In reality it not like that, you save all your life and when you finally got what you wanted, you are old and can not use it fully...

That was my philosophical reasoning for the question.

So say someone decided to gift a significant amount of the access to kids, hypothetically $1M, mostly stocks, ETFs, MFs

What such a transaction details would look like, trusts, taxes etc. Will kids be liable for capital gains or it would be step-up basis? Etc etc.

Has anybody done this ?

Thx

 

[2017ish]

No step up in basis. You'd have to file one or more gift tax returns (equal to number of kids receiving big gifts).

Trust would complicate matters. We wouldn't do that for gifts to our kids, as long as they remain competent. Although I guess if you wanted to safeguard assets in case of a divorce?

We don't intend at present time to gift more than 60k annually to any kid couple--which is the amount we can give to each couple without depleting the exemption.

 

[wanaberetiree]

No step up in basis.

Thanks for the reply!

Say kids get our assets after we pass, will that be also no step up in basis ?

Also when you do allowed 15K, can that be done with ETFs/MFs ?

 

[Souschef]

To reply to your questions:
The present gift tax exemption is $11.4 M
If a gift exceeds $15 K, you must file a form 709, But you and your wife can gift a total of $60 K to child and spouse without having to file a form 709
If you gift stock, etc during your life, the recipient does not get the stepped up basis.
I gifted $$$ to my son to help them buy a house. I will have to file a 2020 form 709 when it is available

 

[2017ish]

Under current (and long standing) law, there is step up in basis at death. E.T.A. there is some low level rumbling about trying to change this....

Gift can be stock/etf/cash/mutual funds.