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I own a small restaurant and own 100% of the company. I want to know if I can gift some of the stock to my children. If I gift up to $13,000 each year of stock does that avoid gift tax? Is that the recommended approach or will I owe tax no matter what I do. What do you recommend?


Expert Joseph Caplan's Answer:



I would highly recommend getting a business valuation if you want to do something like this as I'm assuming the stock of your corporation isn't publicly traded. I thought about a trust taking ownership but I'm not sure if it will work if the restaurant is an S Corporation. Is the restaurant owned by you and another person? If so, the both of you can gift $13,000 without any gift tax implications. Another altermative is to pay the children with stock in the corporation if you want to retain some stock ownership.

Joseph Caplan, CPA

New York

9 yrs experience

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14 Ans.