Estate/Trust Tax Strategies
PreviousUncommon Ways To Reduce Your Taxable IncomeNextGift Stock to an Individual in a Lower Tax Bracket
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. Recipients of gifted stock receive the giver's holding period and cost basis. If the recipient's long-term-capital-gains tax bracket is lower, it will yield tax savings.
. Holding highly appreciated assets, like stock, until death allows your heirs to inherit the assets with a stepped-up cost basis equal to the fair market value (eliminating capital gains tax).
. Charitable trusts may allow individuals to sell appreciated assets tax-deferred (to diversify), receive funds over time, and/or take a large up-front deduction
. Grantor retained annuity trusts (GRATs) are estate planning tools that can shift the appreciation (post-gift) of assets to beneficiaries tax-free
. Depending on your state and circumstances, transferring appreciated assets to a spouse expected to pass away may enable a full step-up in basis (upon death), eliminating capital gains tax.
In addition to the above estate tax strategies, a number of other tax strategies may also apply in certain situations. We encourage you to review all of the strategies detailed on the page to ensure you have the proverbial "full menu" of tax planning strategies to consider for your situation.