Appreciation’s Impact on Your Gifting Strategy

As you revisit your estate plan and consider making alterations heading into 2023, it’s important to think about what you intend to pass on to your loved ones and whether or not this triggers additional tax consequences.Gifting concept: Elderly woman and her property

The appreciation possibility of a property can have significant impacts on whether or not you gift it to someone else. It is commonly recognized that it may be beneficial to give investment property after a price decline, since this minimizes your estate tax and lifetime gift tax exemption while making minimal use of the annual gift tax you while making maximum use of the annual gift tax exclusion.

If property is likely to appreciate, you may want to remove future appreciation from your own estate plan and transfer it to loved ones such as children. This will maximize your gift tax and lifetime estate exemption, while also minimizing gift taxes, estate taxes, capital gains, and lifetime income taxes.

This can also improve the financial situation of your loved ones in the future, so it may be beneficial to gift loved ones. Those property pieces of property you believe will appreciate if property has appreciated significantly. You may wish to hold onto it for at least the short term when it is time to sell the property.

If your loved one falls into a 0% capital gains tax bracket, it is beneficial to make a gift of the property and then let that person sell it for more advanced considerations regarding estate planning and gifting. Set up a time to meet with a qualified estate planning lawyer in MI. We can help you determine how best to align your gifting strategy with the impact of appreciation.



Tags: No tags

Comments are closed.