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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121100  
Subject: Re: Best way to Gift money Date: 4/7/2008 9:05 AM
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I have about $10,000 in a mutual fund at American Century that I need to give to my mother (I won't get into the personal details).

I know that I can gift her that amount of money without incurring taxes but first I have to get it out of the mutual fund.

Any suggestions on the best way to alleviate taxes on this whole transaction? Would it be possible to gift her the shares without withdrawing them first? If so, will she incur taxes when she redeems (I assume she will, but I want to avoid taxes on my end first)?


When the shares are converted to cash the owner at the time bears the tax liability for the gain. Thus it's best for the party with the lower marginal tax rate to be the seller. (I'm assuming the sale will result in a gain, not a loss.) Without knowing which of you that would be we can't advise further, so please let us know and we can fill in the blanks.

Phil
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