The Hidden Tax Consequences of Financial Gifts to Children and Grandchildren
Parents and grandparents often take great satisfaction in helping younger family members financially. Whether it's giving appreciated stock, funding investment accounts, contributing to education savings, or making gifts during your lifetime, generosity can be deeply rewarding. But without careful planning, well-intentioned gifts can create unexpected tax consequences for the very people you're trying to help. A recent article in The Wall Street Journal highlighted a tax issue that catches many families by surprise: the "kiddie tax." The article noted that certain gifts can generate investment income that is taxed at the parents' higher tax rate rather than the child's lower ... Read More
