Tax Tip of the Week
900 N. Kings Highway, Cherry Hill, New Jersey 08034
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Fax: 856.667.3652
For the week of
July 31, 2000
Some assets make better gifts than others
Perhaps you have not accumulated enough assets to concern
yourself with making large gifts. Or maybe you are too young to worry about reducing your estate. But maybe your
parents or grandparents need your assistance in deciding what to gift to you or others.
Some property is better suited than others for such transfers. If property is producing no current income, it may
be less useful to an elderly person than one that is providing cash for current living expenses. This is often
the case with bare land.
An additional factor with the land is that it may be appreciating in value. This will increase the size of a taxable
estate.
On the other hand, if the donor has more than adequate income, gifting away an income-producing asset will help
reduce the current income tax bill of the donor. This can benefit the overall family financial picture if the donee
is in a lower income tax bracket.
Wasting assets may be good candidates to stay in the donor's possession. This includes such items as some royalties
and mining claims or real estate with truly depreciating buildings.
The overriding consideration in an older person's decision to make gifts must be the ability to part with the asset.
Before giving away assets, the donor should be adequately protected from drops in stock market, inflation, future
medical expenses, and any number of other possibilities.
Please give us a call. We will gladly work with you and your attorney to help you achieve sound financial family
planning.
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provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders,
and current tax information.
The information contained in this site is of a general nature and should not be acted upon in your specific situation
without further details and/or professional assistance.
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