517 | Maximize Your Wealth: Understanding Capital Gains Tax Strategies | With Cody Garrett
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Gift Wisely to Maximize Tax Benefits
Gifting appreciated stocks instead of cash can maximize tax benefits and minimize capital gains taxes. When a gift is made, the recipient inherits the original cost basis of the asset, which can be advantageous if the stock has accrued gains. For example, if a parent gifts stock worth $30,000 with $5,000 in gains to their child, the child can sell the stock and realize the gain without incurring taxes, provided their income places them in the 0% capital gains tax bracket. This strategy can also be applied when donating to charity, as gifts of appreciated stock eliminate future realized gains and often allow the giver to avoid taxes on the gains. Before gifting, it’s important to assess the tax implications and ensure that gifts are made wisely, preferably with assets that are appreciating or are at a gain. Never gift assets at a loss; instead, sell them to utilize the loss for possible tax deductions while giving loved ones appreciated assets can be both tax-efficient and financially strategic.
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