Today, with many stocks having recovered from their March lows, it is an especially interesting time to consider gifting stock (or stock mutual funds). There is a double benefit: you get to deduct the gift (if over the standard deduction amount), and your capital gains tax liability disappears! Additionally, for those over 70.5 who have been making gifts from their IRAs to satisfy required minimum distributions (RMDs), the CARES Act passed in March this year waived RMDs. This nullified the tax benefit of making these gifts for 2020. Lastly, with the economy in a precarious position, stock markets may see renewed volatility before the end of the year. Making gifts now while valuations are strong could be a smart move. 2020 is an important year to consider gifting stock. With tax deductibility, capital gains tax savings, and the waiver of IRA RMDs, giving stock is more important than before. Additionally, by making a gift of stock you may create significant space to turn taxable IRA withdrawals into tax-free Roth IRA withdrawals (we will discuss in a future newsletter). While making stock gifts has its advantages, before implementing this strategy it is imperative to discuss this with your tax advisor or CERTIFIED FINANCIAL PLANNER™ professional to make sure it is the right solution for you.
For more information about gifting stock, you may contact Tom at tom@adviticafp.com or our Finance Manager, Heather Avery at heather@friendlywater.org. |