Gifting money
I have a large amount of money in an account with my financial advisor. Anytime I take money out I am taxed. I know (think) I can gift up to $16,000 to my children. Am I able to gift it to a friend? Thank you.
Terry Says
First, you need to know what type of account you have with your advisor. Is it an IRA or IRA rollover? Then, yes, all withdrawals are taxed as ordinary income.
Is it just a regular investment account in your name? In that case, taxation of your withdrawals depends on your gains, and how long you’ve held the investment.
You maybe need a review from an independent, fee-only financial planner to see what you are paying for this advice,and the tax impact. Check out Wealthramp.com.
As to the $16,000 allowable gift (outside of estate taxes at death, which don’t start until your estate is well over $12 million!), yes you can give $16k to anyone –and everyone — without any tax implication to the recipient. BUT you don’t get a tax DEDUCTION for these gifts!!
You can only deduct gifts to a registered charity.
PS Next year, the annual per person gift tax exclusion jumps to $17,000.
