Gifts to minors can be tied up with more than pretty ribbons

Article Abstract:

Donors who plan to make lifetime gifts to minors aim to avail of the annual gift tax exclusion of $10,000, which will entirely remove the lesser of the annual gift tax exclusion or the value of the gift from the their gift and estate tax base. Gifts to minors can be legally accomplished through direct, outright giving, guardianship or trusts. In transferring gifts to minors, the Uniform Gifts to Minors Act (UGMA) and the newer Uniform Transfers to Minors Act (UTMA) present a number of tax and nontax advantages, particularly for gifts of relatively modest amounts whose range is within the annual gift tax exclusion. Although both are geared towards facilitating gifts of certain property to minors, the UTMA has proven to be broader and more flexible than the UGMA. However, all transfers made before the implementation of the UTMA are still governed by the UGMA.

Tax Law, Public Finance Activities

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Gifts to minors can reduce estate, but require choices

Article Abstract:

Individuals with large estates can reduce their estate and gift tax liability by donating before death some of the estate's assets to minors. By giving away assets, donors also limit the growth of their estates by preventing these assets' appreciation and income from accumulating in the estate. In addition, the income of assets are taxed less when the assets have been transferred as a gift to a minor. Aside from these tax advantages, such a transfer ensures that the minor will be adequately provided for. A prime consideration in giving gifts to minors is selecting which assets to keep and which to donate. This decision should be based on the evaluation of such factors as discount for fractional ownership, basis considerations, and appreciation and income.

Transfer taxes, Gift tax

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Gifts of real estate to minors can shift income while satisfying clients' other needs

Article Abstract:

Real estate transfers to minors will constitute an important part in real estate planning. Though additional techniques can be used, trust use usually represents the best technique. Property selection has to be managed effectively. Because the major purpose of trust formation is to move income to the lower bracket taxpayer, unprofitable real estate should not transferred to a donor via depreciation.

Analysis, Tax accounting, Accounting and auditing, Trusts and trustees, Trustees, Trusts (Law), Real property tax, Real property taxes

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