With the holidays approaching fast, coming up with gift ideas can be extremely difficult. But it does not need to be! Whether it is a birthday or another holiday, stocks are often a great gift to give! They are the gift that Keeps on giving! It also outlasts many other traditional gifts that you may receive and throw away a few years later. There are many different choices available to you!
Gifting to Children
If you decide to gift your child with a stock, many different options can be presented to you. If you buy a stock for a child with a custodial account, you or another family member has complete control over the account until the minor reaches age 18. You can also gift a stock from an existing account that you have. With this option, you will have to contact your financial advisor to walk you through the necessary steps to make the transfer. Whoever is receiving the stock, will need to have an account established regardless of whether it is a custodial or a Traditional account.
Gift Exclusion
Giving stock as a gift has never been easier! Whether you are gifting to a child or a friend you can use what is called the Annual gift exclusion. Gift exclusion allows individuals to give up to $15,000 annually to any number of people without paying the gift tax. If you are filing jointly as a married couple you can give up to $30,000 annually. Gift exclusion ends at the end of every calendar year for the previous year so to qualify it must be before December 31st. If you don’t meet the cut-off this year, your gift will go towards next year’s exclusion. It can require time and paperwork so make sure to talk with your financial advisor.
Overall, gifting stock has several benefits. Not only is it the gift that keeps giving, but it is also a great way to teach your children and young relatives about investing. Making the choice on which stocks to give can be tough so make sure to consult with a financial advisor on any questions you may have when gifting stock this holiday season.
Any opinions are those of Paul D. Snow and not necessarily those of RJFS or Raymond James.
Investing involves risk and you may incur a profit or loss regardless of the strategy selected. Raymond James and its advisors do not
offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.