Nothing bars you from taking a distribution from your IRA and then giving the money to your granddaughter. However, if you’re withdrawing the funds from a traditional IRA (and you never made nondeductible contributions to it), you’re going to be fully taxed on the distribution. However, even if you’re under age 59½, you aren’t subject to a 10% early distribution penalty as long as your granddaughter uses the funds for qualified higher education expenses.
Increase in value of property due to market conditions. When you sell appreciated property, you pay tax on the appreciation since the date of purchase. When you donate appreciated property held long term, you may generally deduct the appreciated value.