The holiday season inspires generosity, but smart gifting can go far beyond festive moments and gifts under the tree. On the show this week, we’re digging into the world of gifting strategies, just in time for the end of 2025. Whether you’re navigating planning gifts for loved ones or looking to maximize your charitable donations, this episode is packed with practical advice and fresh ideas.
We break down everything from tax implications of gifting cash, stocks, and even real estate, to making the most of donor-advised funds and qualified charitable distributions to help you balance generosity with smart financial planning, so you can give with both a warm heart and a wise mind.
Family Gifting: The Annual Limits and Tax Fundamentals
The first question many people ask: How much can I give to my family without triggering tax complications? For 2025 and 2026, you can gift up to $19,000 per recipient per year without incurring gift tax. This limit applies to each individual, so as a couple, you and your spouse could each gift $19,000 to the same recipient, effectively doubling the annual gift amount.
But what counts as a gift? Payment for someone’s expenses, like a wedding or home renovation, generally qualifies, unless you’re paying directly for medical or education costs (such as tuition directly to a college or hospital bills), which are exceptions not considered taxable gifts.
Gifting Appreciated Assets
Beyond writing checks, consider gifting stocks, mutual funds, or even partial ownership in real estate. The recipient is not taxed upon receiving these assets, but if they sell, capital gains tax applies, using your original cost basis. Planning is key: If you’re in a low tax bracket and your child is in a high one, gifting appreciated assets might not be optimal. Conversely, if the asset is inherited, it receives a “step-up in basis,” meaning the recipient’s cost basis becomes the market value at your date of death, often reducing their tax burden.
Charitable Giving
The holiday spirit often extends to charitable donations. Three main methods each offer unique benefits, depending on your age, income, and asset base.
The Simplicity of Cash Gifts
Giving cash, whether by check, credit card, or ACH transfer, is straightforward and especially suited to regular donors with less complex portfolios. However, due to the increased standard deduction, only about 10% of taxpayers now itemize, meaning most see little tax benefit from routine cash gifts unless they exceed the standard deduction. Beginning in 2026, an additional deduction up to $2,000 (married) or $1,000 (single) will be available even for those who don’t itemize, helping small cash donors.
Stock Gifts
Donating appreciated stock instead of cash can “supersize your gift.” You can deduct the full market value if held for over a year without paying capital gains tax. Your preferred charities must have brokerage accounts to accept these donations, but most larger nonprofits qualify.
Donor-Advised Funds
For high earners or those looking to batch several years of giving, donor-advised funds shine. You can transfer appreciated assets, receive an immediate tax deduction, and then distribute gifts to charities of your choice over multiple years. This approach allows flexible, strategic support of many organizations while maximizing tax efficiency.
Give with Intention, Plan with Heart
If you’d prefer to give after your passing, thoughtful estate planning can reduce tax burdens for heirs and charities. Consider designating charities as beneficiaries of your pre-tax retirement accounts; these distributions are tax-free to the nonprofit, while passing Roth IRAs or step-up-basis brokerage assets to family members provides them with maximum value and minimal taxes.
Be intentional with both your giving and your planning. Whether giving during your lifetime or creating a lasting legacy, consult with financial advisors to ensure both your loved ones and your chosen causes receive gifts that matter, without unnecessary tax surprises. After all, the greatest generosity is making your money work for others, while keeping your financial future secure.
Outline of This Episode
- 00:00 Balancing gifting and planning.
- 03:18 Choosing between gifting or inheriting.
- 09:13 Tax implications of gifting stocks.
- 11:42 Caution when gifting non-cash assets.
- 15:17 Tax deductions and SALT limit.
- 17:29 2026 tax changes for donations.
- 20:46 Tax benefits of stock donations.
- 25:00 Qualified charitable distributions explained.
- 27:30 Tax-efficient inheritance strategies.
