What are the best assets to gift?
An appreciated stock or mutual fund is a great way to maximize tax benefits. Many investors face combined long-term capital gains tax rates of close to 30%. That includes federal, state income taxes and health care surtax. But college grads often have a long-term capital gain rate of close to 0% on most investments until they start earning over $38,700 (for 2018). This creates the opportunity to make a tax-advantaged gift.
It’s almost always best to gift an asset that has appreciated in value instead of cash. It allows you to avoid paying tax on the unrealized gain of the donated assets, and increases your gifting while decreasing your tax burden.
Consider a Donor Advised Fund (DAF)
You can make a large gift now to take advantage of the 2018 tax deduction without having to commit to naming specific beneficiaries. These choices can evolve over time, and a DAF allows you to earmark assets now, while putting off final beneficiary decisions until later.
LMIS has officially become MaxWealth Management located at Lake Michigan Credit Union. Contact us today at (616) 234-6358 or visit LMCU.org/Investments to schedule a free, no-obligation portfolio review.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
