Is it smarter to gift appreciated stock or cash to family members?

Gifting appreciated stock can be more tax-efficient than cash because it shifts the embedded capital gain to someone in a lower tax bracket. When you give shares, the recipient inherits your original cost basis and holding period; if they later sell and are in the 0% or 15% capital gains bracket, far less tax is owed than if you sold and gave cash. This is especially powerful for gifting to adult children or parents in low-income years. In 2025 you can give up to $19,000 per recipient ($38,000 per couple) without filing a gift tax return. Beware the "kiddie tax" if gifting to minors, which taxes their unearned income at the parents' rate above a threshold. For pure generosity with no gain to shift, cash is simpler – the advantage of stock is unlocking a lower tax on the gain.