The Administration’s tariff policies have contributed to significant volatility in the stock market. Even brief announcements regarding new tariffs often trigger immediate declines in stock prices. This volatility is largely due to the uncertainty surrounding these tariffs, which makes it difficult for companies to predict corporate earnings, supply chain costs, and global market demand. As a result, many firms may be less inclined to pursue growth and expansion. In fact, the U.S. Economic Policy Uncertainty Index has surged to its second-highest level in the last 40 years, reflecting the growing concern in the market. (Source: Goldman Sachs)
While this uncertainty can create challenges for many businesses, it also presents an opportunity for individuals considering the transfer of valuable business interests. Business valuations during periods of market instability can often result in significant discounts, which could be advantageous when gifting assets. These discounts may allow you to reduce the taxable value of the transfer, potentially preserving your gift tax exemption for future wealth transfers.
If you are contemplating such transfers, now might be an ideal time to consider how market conditions could work in your favor.
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