One financial expert said that those wishing to give financial gifts might be best suited waiting until next year to take advantage of a new tax law.

In an interview with Yahoo Finance, Future Perfect Planning President and CFP Cristina Guglielmetti said, that gift givers should consider splitting any large financial gifts to take full advantage of a new change in the gift tax exclusion. The exclusion presently lets people give up to $16,000 without being subject to the gift tax. However in 2023, that limit will be lifted to $17,000.

Guglilelmetti said, “You may want to give part of that gift this year and part of that gift in January in a few weeks and take advantage of the $17,000. That limit increases to $17,000 next year. So that may be something that would work for people who are giving larger gifts.”

She added that for extra tax benefits, gift givers should give charities stock which had appreciated gains from the pre-pandemic bull-market years.

She explained, “You can give appreciated stock, instead of cash. People who are sitting on large appreciated stock gains in mutual funds and stocks in ETFs, you can donate those shares. And that can actually be quite tax efficient. It’s even better sometimes than giving cash. And then you can just buy back the same investment if you still want to own it.”

Guglielmetti also pointed out that giving stock directly to children or grandchildren may not be the best way to reduce tax gains or maximize the cost basis of an asset for an heir.

She went on, “If you want to gift a portfolio to an individual, it’s actually not usually a good idea to do that, to just give them the investments, because the cost basis goes with that gift. I’ve seen this in situations with lots of clients where maybe they were given shares of stock that their parents or their grandparents bought even decades ago and paid almost nothing for it. But now, all of those embedded gains are still there.”

She noted that the better way to disburse such a gift is to give money directly to the recipient so they could then buy the stock themselves.

According to Guglielmetti, “If it’s a situation where you want to give an investment to a person, it may be better to just give them the cash and have them just buy it directly.”