Gift?

[rtsietsema]

Elderly single mother sells large, about $800,000 value, of Whirlpool stock in December of 2022. Puts money into a bank account with her son and daughter as joint owners. Son now, with Mother’s permission, will withdraw about $250,000 from the account for house purchase. Interesting point - Mother is on hospice, probably won’t survive the year, and son and daughter have POA as well. Son mentioned a possible trust. Not sure on that yet.

Since he’s a joint owner of the account, is it actually a gift and should a gift tax form be filed?

[TaxGuyBill]

Yes, if the son withdraws it for his own purposes, it then becomes a Gift and a Gift Tax return would be required.

[New York Enrolled Agent]

TGB is spot on.

From Reg. 25.2511-1

(4) If A creates a joint bank account for himself and B (or a similar type of ownership by which A can regain the entire fund without B's consent), there is a gift to B when B draws upon the account for his own benefit, to the extent of the amount drawn without any obligation to account for a part of the proceeds to A.