If a grandfather who has property worth $300K wants to sell it and divide funds among his children before his death, what’s the best way for them to pay as little tax as possible?

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If a grandfather who has property worth $300K wants to sell it and divide funds among his children before his death, what’s the best way for them to pay as little tax as possible?

He knows he will pay taxes on the profit as he paid $50K for it. However, the children don’t want to be hit with a 23K gift tax. They live in a state that has no inheritance tax.

Asked on January 20, 2015 under Estate Planning, Kentucky

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

He needs to talk with and meet with an estate lawyer to talk about wills, trusts and whether his property would amount to a capital gains tax or if he can send proceeds as he goes along (while alive) at a cap that won't trigger a gift tax. There are many ways to allow some or all to go to the children but you should consider all options, including trusts for them directly.


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