Education

[Dave B.]

Client of mine in her mid 70's expressed an interest in helping her granddaughter out attending a private high school.

Her return consists of decent interest and dividends, IRA, pension, SS.

She asked for mine opinion.

First thought was cashing in some CD's?

Appreciate any thoughts/ opinions........

Thank you....

[Bees Knees]

Cash in the CDs

That would be your best option. Cashing in IRAs would cause more tax, not just on the IRA, but also probably increase the amount of taxable SS.

[Koss]

Stocks?

Client of mine in her mid 70's expressed an interest in helping her granddaughter out attending a private high school.

Her return consists of decent interest and dividends, IRA, pension, SS.

She asked for mine opinion.

First thought was cashing in some CD's?

Appreciate any thoughts/ opinions........

Thank you....

Gift appreciated stock to the kid. Your client avoids capital gain. Kid sells stock, reports capital gain, and proceeds are used to pay tuition. If the kid is over 14, won't have to worry about kiddie tax. Kid's tax rate is probably lower than your client's or the parents. Kid gets a small standard deduction, too.

Custodial account (UTMA) may be the most efficient way to do this.

Actually, the simplest way for your client to fund her granddaughter's education would be to die. But that would probably have some unintended consequences. She should consult an estate planning attorney before doing that.

[Okay, that was morbid, but I couldn't resist.]

Burton

[Matt Sova]

Morbid, but funny

Needed a laugh this morning.