Final answer:
Gifting may be more tax efficient than holding property until death, but the tax implications vary depending on the individual's circumstances and the current laws in place.
Step-by-step explanation:
The question is about whether gifting may be more tax efficient than holding property until death. In terms of estate and gift tax, both options have certain implications.
One option is to hold property until death. In this case, the property will be included in the person's estate and may be subject to estate tax. The estate tax is a tax on people who pass assets to the next generation after death. The tax rate and exemption amount vary depending on the current laws and regulations. However, if the estate is worth less than the state maximum, the person inheriting the property may not have to pay any tax.
The other option is gifting the property during life. This could be more tax efficient in some cases. For example, a gift tax may be imposed on the person giving the gift of money or wealth. However, there is a yearly gift tax exclusion that allows individuals to give a certain amount of money each year without incurring gift tax. This exclusion amount is subject to change and may vary depending on the current laws and regulations.
It's important to consult with a tax professional regarding specific situations and the tax implications of gifting or holding property until death. They can provide personalized advice based on the individual's circumstances and the current tax laws in place.