(Money Magazine) -- Q: A variable annuity that I've owned for many years has risen a great deal in value. Can I gift it to my kids? -- Anthony Cupo, Fayetteville, Ind.
A: You can, and you won't owe gift taxes as long as the annuity's current market value doesn't put you over your lifetime gift-tax exclusion (currently $5 million).
But another tax trap can make this strategy unappealing, says University of Southern California tax law professor Edward McCaffery.
When you make a gift of a variable annuity, you'll owe income taxes on your entire investment gain.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.79%||3.80%|
|15 yr fixed||3.15%||3.14%|
|30 yr refi||3.76%||3.78%|
|15 yr refi||3.13%||3.12%|
Today's featured rates:
More than 5% of DACA recipients have started their own businesses since enrolling the program, according to a recent survey. More
Republican Senators are parting ways with their counterparts in the House when it comes to the mortgage interest deduction. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The Senate's proposed tax plan preserves the adoption tax credit. More