About Us Contact Us Help


Archives

Contribute

 

Shifting Capital Gains To Your Children

Neil Mukherjee
08/10/2017

Shifting Capital Gains to Your Children

If you’re an investor looking to save tax dollars, your kids might be able to help you out. Giving appreciated stock or other investments to your children can minimize the impact of capital gains taxes.

For this strategy to work best, however, your child must not be subject to the “kiddie tax.” This tax applies your marginal rate to unearned income in excess of a specified threshold ($2,100 in 2017) received by your child who at the end of the tax year was either: 1) under 18, 2) 18 (but not older) and whose earned income didn’t exceed one-half of his or her own support for the year (excluding scholarships if a full-time student), or 3) a full-time student age 19 to 23 who had earned income that didn’t exceed half of his or her own support (excluding scholarships).

Here’s how it works: Say Bill, who’s in the top tax bracket, wants to help his daughter, Molly, buy a new car. Molly is 22 years old, just out of college, and currently looking for a job — and, for purposes of the example, won’t be considered a dependent for 2017.

Even if she finds a job soon, she’ll likely be in the 10% or 15% tax bracket this year. To finance the car, Bill plans to sell $20,000 of stock that he originally purchased for $2,000. If he sells the stock, he’ll have to pay $3,600 in capital gains tax (20% of $18,000), plus the 3.8% net investment income tax, leaving $15,716 for Molly. But if Bill gives the stock to Molly, she can sell it tax-free and use the entire $20,000 to buy a car. (The capital gains rate for the two lowest tax brackets is generally 0%.)



Bookmark and Share | Share your Comments

Comments :
Post a new message

In this Issue
Karma On Record


A seeker asks Sadhguru, when karma is continuously being recorded in so many ways, is it not an elaborate trap to keep one in suffering?
[more]

Karma On Record
Arangetram: Bhoomika Kumar


Cherished memoirs - Disciple in Dallas, Guru in Boston and the arangetram in Bengaluru!
[more]

Arangetram: Bhoomika Kumar
Sravanth Malla Wins 2017 South Asian Spelling Bee


Sravanth Malla correctly spelled the word “Chytridiales” (an order of simple, aquatic fungi of the phylum Chytridiomycota) during the 2017 South Asian Spelling Bee finals to clinch the title of national champion and took home a cash prize of $3,000.
[more]

Sravanth Malla Wins 2017 South Asian Spelling Bee
The Biggest Garba Of New England


Academy of Creative Arts and Dhoom Entertainment are collaborating to bring the biggest Garba of New England to Boston area on September 9th at the Ambrosia Banquet facility in Foxboro, MA featuring Shri Atul Purohit. BUY TICKETS
[more]

The Biggest Garba Of New England
Anindita Lal: Madhubani RangPravesh


Anindita Lal showcased the Indian folk art known as Madhubani, or Mithila art as ‘RangPravesh' at the Acton Discovery Museum. She is a student of Sunanda Sahay.
[more]

Anindita Lal: Madhubani RangPravesh

You may also access this article through our web-site http://www.lokvani.com/




Home | About Us | Contact Us | Copyrights Help