When planning gifts for children on your holiday list, you might want to think beyond the traditional retail offerings. Consider financial gifts that can bestow benefits for many years to come.
Some financial gift options you might consider:
- U.S. savings bonds. While paper bonds are a relic of the past, you can gift “electronic” bonds by purchasing them through the U.S. Department of Treasury website (www.TreasuryDirect.gov).
- IRAs (regular or Roth). For 2015, you can contribute the lower of $5,500 or the earned income of the child. An early financial start can produce amazing benefits from compounded interest accumulated over several decades.
- Stocks or mutual funds. Equities are a good way to introduce a child to the investment world. If you give appreciated securities to an adult child or grandchild, your gift could allow the child to enjoy beneficial capital gain rates when the shares are sold.
- Vintage stock certificates. Vintage framed certificates are available for many companies. A historic or collectible stock certificate can provide a colorful reminder of the importance of investing for the future.
- Collectibles. Postage stamps or coin collection kits can provide years of enjoyment and form the basis for a life-long hobby. Consider starting a child’s collection with an official U.S. Mint proof coin set for the year the child was born.
Please call us if you would like to review the tax issues related to any of these financial gift options, especially if you are considering a larger amount.