Transcript:
This is money talks with Chad Olivier, sponsored by Olivier Group.
Hi. I’m Chad Olivier, CEO and certified financial planner with Olivier Group. For many families, the family home is not only filled with memories, but could be a great asset to pass to the next generation. Let’s look at an example. We have a couple who bought their house decades ago for eighty thousand dollars Today, that same home is worth over six hundred thousand dollars At first, they thought about gifting the home to their kids now, while they’re still alive and they can see them enjoy it. But there’s a problem.
If they gifted the house now, the kids would inherit the original eighty thousand dollars cost basis.
Basis. If the kids ever sold it, they could owe taxes on over five hundred thousand dollars in capital gains. That’s a major tax hit. Instead, we planned for the parents to keep the home in their estate, and when they pass away, the house could get a step up in basis, meaning that the value resets at the fair market value at the time of death.
So if it’s worth six hundred thousand dollars then, that becomes the new cost basis, and if the kids sell it soon after, they could potentially owe little to no capital gains tax at all. This can be a powerful strategy that can protect your family’s wealth and honor your legacy. Now, if you’re thinking about gifting during your lifetime, the IRS allows you to gift up to nineteen thousand dollars per person in twenty twenty five without any gift tax. If you’re married, you can combine that for a thirty eight thousand dollars per recipient.
No tax filing needed. And for the larger gifts, remember, the lifetime gift and estate tax exemption is still very generous at thirteen point nine nine million dollars per person, but that’s expected to shrink after twenty twenty five unless Congress acts. Bottom line, the way you time your gifts can mean the difference between a tax burden and a true blessing for your family. If you like help creating a plan that fits your family’s goals, visit us at olivier group dot com, and we’re ready to help. And that’s why money talks, but planning pays.
This has been Money Talks with Chad Olivier.
