TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, November 16, 2012

WSJ: Parents Race to Make Year-End Gifts of Real Estate to Their Kids

Wall Street Journal:  Feathering the Kids' Nests:

Some homeowners race to transfer property to their children before lifetime gift-tax exemptions expire Dec. 31.

Want to give the kids a little something extra for the holidays? Get going. The generous lifetime gift-tax exemption — in which couples can give up to $10.24 million to descendants tax free — expires at the end of the year.

The lifetime exemption will drop to $1 million for individuals (from $5.12 million) and to $2 million for couples (from $10.24 million) if Congress doesn't intervene. While some experts expect Congress to act, they think the resulting cap will still drop.

So for wealthy families, there's a limited window to give sizable assets—including real estate—to children while avoiding a tax hit. ... Wealthy families have been taking various measures to prepare for lower exemption limits and higher tax rates. Some people gift properties using a separate vehicle, such as a limited-liability company or a trust. These allow parents to maintain some control, and since these vehicles can minimize the value of the gifts, parents can maximize the lifetime gift-tax exemption elsewhere.


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"multiple owners create what is called a lack of marketability discount".

That should tell you about all you need to know about the author.

If only I could find a market for these GE shares I own!!

Posted by: the real anon | Nov 18, 2012 9:16:07 AM