Completed Gift

[Gretel]

I have difference of opinion with someone about completed gifts. To be more precise: Putting someone as joint owner on your checking account. TTB says it's completed only if withdrawn. Other person (as much respected by me as the TTB) says it's completed upon having name on account with value whatever is in account at that time.

Then I figured it would also depend on state law: MT law is silent on this issue. Now, what do I do? Can someone give me any authority?

I mean, lets say I have $10,000 in my account on 1/1. and put Bees as joint owner on it. Thereafter, each month I deposit $5,000 put also pay expenses of $6,000. After account is depleted (sorry Bees), I close account. Bees could have cleaned out my account after each deposit and would be $70,000 richer.

Per TTB gift would then $70,000, per other person $10,000. It makes much more sense to me to have to report whatever is withdrawn, but sense doesn't help much in our tax world.

[Gene V]

Gabriele, I don’t know if this is what you are looking for, here is a paragraph from the instruction for Form 709:
If you create a joint bank account for yourself and the donee (or a similar kind of ownership by which you can get back the entire fund without the donee’s consent), you have made a gift to the donee when the donee draws on the account for his or her own benefit. The amount of the gift is the amount that the donee took out without any obligation to repay you.
Look like the gift would only be completed when the donee takes the money out.

[New York Enrolled Agent]

" have difference of opinion with someone about completed gifts. To be more precise: Putting someone as joint owner on your checking account. TTB says it's completed only if withdrawn. Other person (as much respected by me as the TTB) says it's completed upon having name on account with value whatever is in account at that time."

Gabriele - The TTB wins this one !!!!! If your other person doesn't believe Gene V. then you can convince the "other person" by showing him/her Reg §25.2511-1(h). There is an example in that section that says the gift is completed only if the donee reduces some amount to his exclusive possession.

[Gretel]

Thanks so much, Gene & NYEA. This is what I am looking for, I knew TTB was right but I didn't know where to find the proof.