What are some tax-smart ways of accelerating my giving program to my children?
There are a number of ways to accelerate your gifting program to your children.The Internal Revenue Service allows you to give up to $12,000 to anyone each year without triggering a gift tax. Thus, you could give $12,000 to each of your sons and $12,000 to each of your daughters and still avoid the tax. If you re married, your spouse can make separate gifts for the same amount, which means each of your kids could get $22,000 a year without triggering any gift tax. You could also create a family limited partnership, or limited liability company, and make gifts of partnership or member units to your children at deep discounts. Discounts for lack of marketability and minority interest can range from 10% to over 50%. However, the actual valuation discount must be established by a professional valuator.To meet IRS standards, the family limited partnership must have a valid business purpose. The children who become limited partners must have the legal ability to exercise their rights, and ca
