Gift between parents and child

[totalfreedom]

What is the name of your state? MN

I'm looking to transfer ownership of our corporation from my parents to myself. I own 50% of the shares and they each own 25%. I would like to gift the shares in such a way as to avoid taxation. My reason for this is to mimimize exposure to possible long term care costs in the future.

I believe it's a simple documents that is executed between us.

Could sure use some help on this.

THANKS!

 

[LdiJ]

What is the name of your state? MN

I'm looking to transfer ownership of our corporation from my parents to myself. I own 50% of the shares and they each own 25%. I would like to gift the shares in such a way as to avoid taxation. My reason for this is to mimimize exposure to possible long term care costs in the future.

I believe it's a simple documents that is executed between us.

Could sure use some help on this.

THANKS!

This is NOT something that you want to do without competent local advice. However, I will identify some issues for you.

If they gift you the shares, their "basis" in the shares is your basis. This could result in gift taxes for them (if their lifetime total for gifting is above 1,000,000) and potential (and potentially high) captial gains tax for you. There is no way around that.

If you inherit the shares, there is no gift tax for them, but there may eventually be some estate tax, depending on the value of the shares and the exclusion rates at the time. There would also potentially be much lower capital gains tax for you, because your basis would be the fair market value as of the date of their deaths.

However a trust of some sort might get you closer to what you are looking for.

Again, you need to be talking to local professionals....this one isn't a DYI project.