And you could even transfer enough shares to cover the cost if they are cheaper than your taxes.I would compare the interest costs you'll incur with the LOC to the capital gains taxes your kids would actually pay if they sold your appreciated shares. It's obvious that someone in the family is going to have to pay something. I think the way to "win" is to minimize the costs the "family" pays. Whether it's you or them.
The question is not whether to give them the money but rather what is the financially best way to give them the money. I still have not heard a good argument against the Line of Credit strategy. The current interest rate on the LOC secured by the brokerage account is under 6.5%.
Regards,
Say you would pay 30% tax and they would pay 20%. You can transfer 1.2 million in shares which is cheaper than the 1.3 million you'd have to sell to pay the taxes yourself. So you save $100k and they still get the same amount after taxes.
You can also spread it across multiple years if needed to avoid hitting certain brackets.
Statistics: Posted by the_wiki — Thu Sep 11, 2025 11:42 am — Replies 39 — Views 1438