In the process of financial planning and wealth inheritance, how to legally reduce taxes and properly use the annual gift tax exemption of 2.44 million yuan is an important issue that many families pay attention to.
However, the type and method of gifting assets will directly affect the future tax burden and the appreciation of family assets.
The following will provide an in-depth analysis from the perspective of cash, real estate, stock and insurance policy gifts, and help everyone formulate a more comprehensive inheritance plan based on the principles of integrity and kindness.
1. Cash Gift: Flexible and Simple Taxation
Cash gifts are the most flexible and simple way to pass on wealth, especially suitable for helping children buy a house or invest.
1. Make full use of annual tax exemptions
According to current regulations, each person can make a tax-free gift of 2.44 million yuan per year, and a couple can jointly donate up to 4.88 million yuan to their children.
In addition, using the annual handover points, that is, December now and January next year, gifts of up to 9.76 million yuan can be divided into two waves and are completely legal and tax-free.
2. Help your children buy a house in a timely manner
While housing prices remain high, if their children need to buy a house, parents can use cash gifts to help pay the down payment or reduce loan pressure.
This method not only has a low tax burden, but will also have no additional impact on future sales or transfers.
# cash # gifts # taxes # down payment # mortgage # tax exemption # house purchase # parents
2. Real estate gift: the double-edged sword of tax planning
Real estate gifting is a method of asset inheritance chosen by many people, but its potential tax implications are often overlooked.
The following are the main tax risks and considerations:
1. Impact of the new real estate and land integration tax system
According to current regulations, when the donated real estate is resold after the 105th year of the Republic of China, the new real estate and land integrated income tax system needs to be applied instead of the progressive tax rate of the old system.
This results in a significant increase in the income tax liability on the sale, especially if the property value has increased significantly.
2. The cost of the donated real estate is determined to be low.
When gifting, the cost of the real estate is calculated based on the assessed present value of the house and the announced present value of the land, which is usually lower than the market value.
When the recipient sells in the short term, the actual profit is overstated, resulting in more taxes being paid.
For example, if a couple donates a property with a market price of 50 million yuan to their children, and the children sell it after holding it for less than 5 years, they will need to pay a combined real estate and land tax of up to 35%, which may exceed 17.5 million yuan, which will put a huge burden on the family finances. .
More formal solution:
It is recommended to increase the cost directly by buying and selling. If it is sold again in the future, the tax burden will not be too high due to the increase in the combined real estate and land tax rate.
In addition, you can also make good use of what is mentioned above when buying and selling, and first use the method of gifting cash to reasonably save taxes:
For example, if the mother wants to sell a 10-million-dollar property to her son, she can make good use of the donation amount of 2.44 million yuan each from her father, grandpa, and grandma to reach a tax-free cash payment of 7.32 million yuan, and pay the remaining amount separately to .
At this time, if you are smart, you will ask, what about the amount of mother's gift?
Of course, you can give it as a gift, but I would recommend giving it away after the sale, because it will be more complicated for the seller and the gifter to be the same person, and the buying and selling process is more likely to be judged as a cheap sale, so it is recommended to give it away after the settlement is completed.
3. Impact on tax rate during holding period
The combined real estate and land tax rate is closely related to the length of the holding period:
The tax rate is 45% within 2 years of holding, the tax rate is 35% for more than 2 years but less than 5 years, and the tax rate is reduced to 20% for more than 10 years.
If the children are unable to hold the property for a long time, the tax burden will increase significantly.
Here is a specific solution to lower taxes:
In accordance with the provisions of Article 24-5 of the Income Tax Act, Paragraph 2, Paragraph 1, Item 4, the case of involuntary transactions of houses and land held for less than 5 years due to involuntary factors" (hereinafter referred to as the case of involuntary transactions of real estate by profit-making enterprises) ), if individuals and profit-making enterprises trade houses and land in compliance with the prescribed circumstances, the 20% tax rate may be applied.
That is to say, we need to see if the sale you make in the short term qualifies as an involuntary sale. If so, you can calculate it with the "20%" real estate and land combined tax. However, in this special case, I will leave it to my guests privately. consult.
If there is a need for real estate inheritance, priority should be given to passing it on through inheritance to avoid land value-added tax and the new high tax burden.
At the same time, although gifting real estate in years can save gift tax, the impact of combined real estate and land tax on future sales should be fully considered to avoid losing a big deal for a small amount.
# Real estate # Planning # Real estate and land integration tax # Risk # Inheritance # Involuntary # Tax burden
3. Stock gift: need to pay attention to valuation and tax risks
Stock gifts are a way to pass on the potential for asset appreciation to your children, but you also need to pay special attention to the IRS's determination standards.
1. Listed OTC stocks
The donation amount of listed or over-the-counter stocks is calculated based on the closing price on the day of donation; this transparent market valuation method is relatively simple and has low tax risks.
2. Valuation risks of unlisted stocks
If unlisted stocks are donated to a family business, the IRS will not calculate the face value (10 yuan), but the company's net asset value on the date of gift.
For example, if the company's net asset value is high, the gift limit will be significantly increased, resulting in an increased potential tax liability.
Therefore, before making a gift, you should consult a professional accountant or tax consultant to clearly understand the relevant regulations and confirm the correct valuation method to avoid valuation errors that lead to overpayment of taxes.
# stock # listed # listed on the counter # IRS # consulting # accountant # consultant
4. Policy gift: transfer of potential risks and rights
Although the operation of gifting a policy by changing the policy holder is simple, you still need to pay attention to several key points:
1. Scope of donation
When the proposer is changed, it is equivalent to giving the policy's "policy value reserve" to the new proposer free of charge.
2. Rights and interests of the new guarantor
The new policyholder has all the rights and interests of the policy, including the right to change the beneficiary, borrow money from the policy, and even terminate the contract.
Therefore, sufficient communication is required before making a donation to ensure that the distribution of rights is in line with family consensus.
For high-value insurance policies, you should negotiate and cooperate with insurance companies or professional advisors to avoid future disputes caused by misoperation.
# quota # tax exemption # rights # negotiation # high price # policy # insurance # family
Wealth inheritance is a complex and multi-faceted process that requires comprehensive consideration of taxes, asset types and family needs.
Cash gifts are relatively flexible and the simplest method of inheritance; although real estate can maintain its value stably, tax planning requires extra caution; gifts of stocks and insurance policies require attention to valuation and equity arrangements.
It is recommended to develop a comprehensive and personalized wealth inheritance plan through the assistance of professional consultants to ensure the smooth continuation and appreciation of family wealth.
This website does not have those annoying ads that block the webpage and hinder reading!
If you think the article I wrote is helpful to you, could you please fill in a Questionnaire, allowing me to better understand everyone’s needs and write more high-quality content.
