My fiancée and I have been together for close to 10 years and have been operating and making life decisions as if we have shared finances (although obviously not legally shared finances). Over time, our individual accounts have become unbalanced due to a variety of factors (salary differences, job changes due to relocations, etc.). I am looking to balance our individual net worth's closer to 50/50 by gifting >$200,000 to my fiancée via in-kind transfer of index fund shares. I wanted to be careful with this process given the large sum of money and potential tax implications. I'd like to seek guidance from the experts here on a few questions:
- I understand this is well in excess of the 2024 annual gift tax exclusion of $18,000 and I would have to file Form 709. My understanding is that this would debit (~ $200,000 - $18,000 = $182,000) from my lifetime gift tax credit, but I would not incur a tax liability. Is this a correct assumption or am I missing anything here?
- It seems that the lifetime gift tax exclusion is likely reverting back to pre-TCJA levels where it'll be reduced from $12.92 mil to closer to $5 mil. In my case, would I be left with $5 mil - $200,000 = $4.8 mil remaining in my lifetime gift tax exclusion assuming I make this gift later in 2024?
- Is there anything I need to be mindful of in the case of an in-kind transfer of index fund shares? Am I correct in the assumption that there should be no taxable event (e.g. capital gains, dividends, other distribution, etc.) associated with an in-kind transfer of index funds via a brokerage transfer (for different accounts owned by two different people within the same brokerage)?
Thanks all!
