How To Transfer Wealth WITHOUT Paying Taxes!

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How To Transfer Wealth WITHOUT Paying Taxes!

LYFE Accounting 06.05.2026 743 просмотров 60 лайков

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How to Avoid Tax Mistakes When Passing Down Wealth. Get a Free Consultation: https://mycpacoach.com/contact/ In this video, I break down how to transfer wealth to your children without triggering unnecessary estate taxes, gift taxes, or massive capital gains taxes. I explain why estate taxes are largely a myth for the majority of people, how gift tax rules actually work, and how you can use your lifetime exemption strategically to transfer money while you’re alive. I walk through gifting appreciated assets, and how that can create a huge tax burden for your kids due to carryover basis. You’ll also learn how the step-up basis works, why it’s one of the most powerful tools for passing down wealth tax-efficiently, and how different assets, like real estate, stocks, businesses, and retirement accounts, are treated when inherited. As a licensed CPA who tax plans every day, I’ll show you how to protect your wealth, reduce taxes, and set your children up the right way. Go ahead and save this video, hit the like button below, and let’s jump right in. #taxplanning #estateplanning #wealthtransfer #cpatips #financialfreedom Navigating tax implications when passing wealth: (0:00) Estate Tax Myth: (1:08) Gifts: (2:33) Capital Gains Tax: (4:35) Carryover Basis: (6:11) Step-Up Basis: (6:57) Real Estate and Brokerage Assets: (8:43) Retirement Accounts: (9:07) Roth Accounts: (9:34) /// Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

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Navigating tax implications when passing wealth

If you have built up any form of wealth, whether it's through stocks, real estate, retirement accounts, or even a business, and you're planning on transferring it to your children one day, please be aware that you are sitting on a potential tax bomb that can blow up their inheritance. Fire in the hole! — [screaming] — So many people mess this up by subjecting their kids to hundreds of thousands of dollars in additional taxes, like estate taxes, gift taxes, and even capital gains taxes. But what if I told you that there was a way to pass down your wealth to your children without them having to pay a single penny in taxes on most of your assets? Well, believe it or not, there are ways to take all of the wealth that you have built up in your home, your stock portfolio, your business, or other investments, and pass it down to your kids tax-free. And today, I'm going to show you how to actually accomplish this as a licensed CPA that tax plans every day at mycpacoach. com. So, let's jump right in. Okay, so let's start with the estate tax

Estate Tax Myth

myth. Most people think that if they have any meaningful amount of wealth, that they're going to get crushed by estate taxes when they pass. But here's the truth, almost no one pays estate tax. Under current tax rules, the federal estate tax exemption is about $15 million per individual. So, if you're married, your combined exemption is nearly $30 million, which means unless you're leaving your kids more than $15 million as a single person or $30 as a married couple, you would not pay a single dime of federal estate taxes. According to the IRS, less than 0. 2% of estates actually pay federal estate tax. That's two out of every 1,000 people. So, most people will not have an estate tax issue. Most estate issues are related to things like probate and disputes over the actual estate, which can be largely avoided by setting up things like revocable living trust and wills to safeguard your estate. But for 99% of people, estate tax is not the problem. It's things like gift tax and capital gains tax that you or your kids may pay on assets they receive, but even those taxes can be avoided as well. So, let's start with gifts. Maybe your kids cannot afford to wait until you actually

Gifts

pass to start receiving your help. So, you start gifting them money while you are still alive, which sounds great until you hear about gift taxes. For the 2026 tax year, you are required to report gifts to anyone that exceeds $19,000 per person or $38,000 if you are using your spouse's gift limits as well. But here's the thing, most people think that if they gift more than the gift tax exclusion, that they're automatically going to owe gift taxes, and that is not always the case. You can actually offset your taxable gift income with the same estate tax exemption that we just covered. For example, let's say you want to give your child $200,000 to help them make a down payment on a new home. Well, $181,000 of that gift would exceed that annual exclusion, and technically would be subject to gift tax. But what most people do not know is that you can apply some of your $15 million estate tax exemption as a credit against that taxable gift. The IRS allows you to start applying this exemption on wealth you transfer while you are still alive, which means you could take $181,000 from your $15 million exemption and apply it as a credit against your gift tax. So, you could effectively pay zero gift tax and still have 14. 8 million dollars of an exemption left that your kids could receive upon receiving your estate. But not every type of asset is good for gifting while you are alive. If you are gifting cash, then sure, this might be a good idea. But if you're gifting appreciated assets while you are alive, like stock portfolios, a business, property, or retirement accounts, you may run into another issue, capital gains tax. This is where

Capital Gains Tax

I see people make huge mistakes and create very large tax bills for themselves and their kids without even knowing it. And it's because assets that you transfer to your kids while you are still alive are taxed much differently than it would be if your kids receive them as an inheritance. It comes down to a basis issue, which can be fully avoided once you understand it. So, let's break this down a little bit more. In very simple terms, your basis in any asset is simply the amount you paid for it, plus any big improvements you made to it. For example, let's say you bought a home for $100,000, and 30 years later, that home is worth $1. 1 million. Or let's say you bought $100,000 worth of Apple stock many years ago, and somehow it's worth the same amount, $1. 1 million. Or maybe you started a business, and your ownership stake in that business is now worth $1. 1 million. Whatever it is, as long as you don't sell those assets, you would never pay any tax on that $1 million of equity that you built. But let's say you transferred any one of these assets to your children while you are still alive. Well, the problem with that is that they would inherit your basis, which in this case, let's just say it's $100,000, which means if they turned around and sold that asset, they would instantly have to pay tax on a $1 million capital gain. This is called

Carryover Basis

carryover basis. When you transfer appreciated assets to your kids while you are still alive, they take on your basis, not the fair market value of that asset. But fortunately, there is a way to avoid this entire setup and transfer assets to them when their basis is the fair market value instead of what you actually paid for it. So, in the same example, imagine them getting the same asset worth $1. 1 million, and that amount being their basis, resulting in zero capital gains tax when they turn around and sell it. So, how exactly is that possible? Well, in short, we don't want our kids to get our carryover basis. We want them to get something called step-up basis, which in

Step-Up Basis

very simple terms means that their basis will step up to the fair market value of the asset they inherit instead of our original basis. Step-up basis is practically a cheat code to passing down wealth to your kids. So, let's talk about how it actually works. Under current tax law, when you pass away and leave assets to your heirs through your estate, the IRS steps up the cost basis from what you paid to what the asset is actually worth on the day you pass away. It effectively wipes out all of the appreciation that happened during your lifetime for tax purposes. So, when we go back to our prior or original example, the $100,000 we paid for our asset is completely irrelevant when our kids inherited under the step-up basis rules. Even if you own a rental property and took massive amounts of depreciation to bring your basis down to zero, it would not matter. Your kids would avoid depreciation recapture completely by simply inheriting your assets when you pass. Step-up basis looks at what the asset is worth when they inherit it, which in this example is $1. 1 million. So, they would receive a million-dollar asset, the IRS would receive nothing, single-handedly saving them around $200,000 in taxes. And all of this is 100% legal under Section 1014 of the Internal Revenue Code. Now, what most people don't know is that step-up basis works differently depending on what type of asset we are talking about here. For example, with real estate, stocks, and liquid assets that may be in a brokerage

Real Estate and Brokerage Assets

account, you generally would get the full step-up basis treatment I just explained. Your kids would inherit it at fair market value and owe zero tax on the appreciation. If you own a business, the same step-up rules generally apply, but may depend on your ownership stake in that business and how that business is actually structured. But if you're passing down things like retirement

Retirement Accounts

accounts, the rules are completely different. For example, if you have a traditional IRA or 401k, there is actually no step-up basis treatment when your kids inherit it. From a tax perspective, this is one of the worst things that your kids can inherit because your kids would have to pay regular income tax on every dollar they take out of those accounts. But if you're passing down things like a Roth

Roth Accounts

401k or a Roth IRA, the rules are more in your favor. Roth money comes out 100% tax-free to your kids. They can take out every single penny and pay zero tax on it. But ultimately, if you're planning on passing down any type of property that has appreciated in value, you need to understand the consequences related to how your heirs actually would receive that property. Ultimately, if you transfer it to them while you are alive, you can easily create a capital gains tax issue later down the road when they sell the asset. But, if they can inherit those same assets when you pass away, they may benefit from step-up basis, which would give them a massive head start without a huge tax bill. This is also the benefit of implementing different wealth strategies like the buy and hold strategy or the buy, borrow, die strategy, which we also cover on this channel. When you buy assets that grow in value, not only do you build wealth, and not only can you borrow against it when you need liquidity, but your kids can also benefit from receiving those assets without paying a ton of taxes through step-up basis. Let me know what you think about all of this in the comments below, and if you found this helpful, be sure to let me know by clicking the like button below. And if you need immediate assistance, just go to mycpacoast. com to apply to work with my team today.

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