[Fastskiguy]

Originally Posted by retiredguy123

Everything you said sounds correct to me.

Originally Posted by Fastskiguy

I think I understand you can give 18K/yr and not tell anybody anything. You can give more, up to your 13 mil lifetime, you just have to tell the IRS. But it's the tax bit I don't understand (apologies if this is a thread hijack).

Let's say a person has 1 million in cash they want to give to another person. Fill out your form, write a check, and we're done.

However, let's say a person has 1 million in stock that they bought in 1970 for $10K. If they give the stock to the other person without paying tax and if the recipient wants cash to buy a house or whatever then they'll need to sell the stock and pay the capital gain tax....is that right? No way to get of the gains taxes?

Finally, if the old person dies and leaves the million in stock to the other person then they start with a cost basis on the day of death....they can sell that day and not pay ANY tax...is that right?

Thanks

Joe

OK and I have a quick followup.....let's say the old person gives the other person 1 mil of appreciated stock, no tax. Until they sell it, then gains taxes.

OK....when the old person dies is the cost basis stepped up like it would be in a "regular, passed the stock when he died" type scenario?

I'm guessing "no" as once it's given then it's the young persons' stock and so when or if the person dies makes no difference.

Which, if true, makes giving appreciated assets when you are close to dying a much more difficult decision. You'd like to give it while you're alive but the taxes (again, on appreciated assets) are definitely a factor!

Joe