My kids both have Vanguard accounts that I set up for them last year and neither have any significant earned income. We have enough VTSAX that were acquired 10+ years ago that have appreciated significantly to fund their college.
So I was wondering if the best option might be to transfer some of this already appreciated stock as a gift to each of them: $30k each, at today's FMV, but transferring older shares (using SpecID). Since neither has any earned income, them selling this appreciated stock will yield a lower tax burden than if I were to sell and give them the cash. I could do this now and then again in January.
A few questions:
- is this possible within Vanguard (ie selecting older stock to transfer)?
- is this the most tax-efficient way to achieve what we wish to achieve?
- is there a different way I should be thinking about this?
- edited to add: because they are my kids, does the $15k gift tax limit apply here at all - ie can i transfer the whole amount in one go?
Thanks in advance.