{"id":115898,"date":"2025-11-03T17:05:06","date_gmt":"2025-11-03T17:05:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/115898\/"},"modified":"2025-11-03T17:05:06","modified_gmt":"2025-11-03T17:05:06","slug":"how-can-i-give-100000-to-each-of-my-daughters-in-a-way-that-minimizes-taxes","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/115898\/","title":{"rendered":"How can I give $100,000 to each of my daughters in a way that minimizes taxes?"},"content":{"rendered":"

Pay Dirt is Slate\u2019s money advice column. Have a question? Send it to Kristin and Ilyce here<\/a>. (It\u2019s anonymous!)<\/p>\n

Dear Pay Dirt,<\/p>\n

I want to give a recent inheritance to my two daughters\u2014$100,000 each. The oldest just bought a house and needs to invest a lot of money fixing it up. This money will make a very big difference to her. The youngest lives at home, has no real expenses, and not a lot of financial acumen as far as I can tell. For my oldest daughter, is there any difference, tax or otherwise, between giving her money or paying for housing upgrades? For my youngest, besides the expense of setting up a trust, what can I do to help her keep this money for important future purchases?<\/p>\n

\u2014Sharing the Wealth<\/p>\n

Dear Sharing the Wealth,<\/p>\n

It\u2019s lovely of you to share this inheritance with your children when they need it. And, you recognize that your kids are at different places in their lives, but are willing to find a way to make things as equal as possible. Let\u2019s look at how you might work with each daughter:<\/p>\n

For your oldest daughter: There\u2019s no tax difference between handing her $100,000 or paying contractors directly\u2014both are gifts to her. She won\u2019t owe taxes either way, since gifts aren\u2019t taxable income to recipients. On the other hand, you\u2019ll need to file IRS Form 709<\/a> to report gifts over $19,000 (which is the annual exclusion amount for 2025) or $38,000, if you and a spouse are giving her a gift together. But you won\u2019t owe gift tax unless you\u2019ve already burned through your $13.99 million lifetime exemption under 26 U.S. Code \u00a7 2505<\/a>.<\/p>\n

The practical difference? Paying contractors directly gives you control and ensures the money goes toward the house. Handing her cash respects her autonomy as an adult. Start with a conversation and talk through the options. Let her tell you how she prefers to handle contractors and the cash.<\/p>\n

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For your youngest: I\u2019d skip the trust. It\u2019s expensive (really, overkill) to set this up for $100,000\u00a0and someone living at home. Instead, think about how this could be a teaching moment. Consider setting up a financial advisor consultation before she gets the money. Maybe even make it a condition of the gift. A one-time comprehensive financial plan costs around $1,500 to $3,000 and could save her from disastrous decisions now and down the line.<\/p>\n

If she\u2019s working, you could set up a Roth IRA and put up to $7,000 (2025 contribution limit<\/a> for those under age 50) and put the rest into a brokerage account, so she can put into practice some of the lessons the financial advisor passes along.<\/p>\n

You might also consider a staged distribution: give her $25,000 now, with the rest coming in chunks tied to milestones like a house down payment, graduate degree, or turning 30\u2014whatever fits your family and, more importantly, her life. You could also give her some ongoing financial education alongside the money by providing a few of the best-known financial advice books. (This would be a nice addition to your older daughter\u2019s gift, too.)<\/p>\n

The real gift, of course, isn\u2019t the money. It\u2019s teaching your children how to use it and invest it wisely so it helps them get where they want to go in life.<\/p>\n

\u2014Ilyce<\/p>\n

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Get the latest from Prudie and our columnists in your inbox each weekday, plus special bonus letters on Saturdays.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Pay Dirt is Slate\u2019s money advice column. Have a question? Send it to Kristin and Ilyce here. (It\u2019s…\n","protected":false},"author":2,"featured_media":115899,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[1665,138,246,111,139,69,244,245,479,1666],"class_list":{"0":"post-115898","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-advice","9":"tag-business","10":"tag-finance","11":"tag-new-zealand","12":"tag-newzealand","13":"tag-nz","14":"tag-personal-finance","15":"tag-personalfinance","16":"tag-relationships","17":"tag-slate-plus"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/115898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=115898"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/115898\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/115899"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=115898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=115898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=115898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}