Gift Tax on joint accounts - help

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    Gift Tax on joint accounts - help

    My Dad came into some money when he was placed on an account with a friend who was passing away. He died one month after adding him to his checking account. The amount is less than 100K and it appears to me that 50% of the funds - $14,000 (2013 rules) would be subject to Gift tax.

    If so, does it matter if he spends down some of the funds on the decessed medical bills?

     

    Thank you for any help...

     
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    Re: Gift Tax on joint accounts - help

    In response to thehub's comment:

    My Dad came into some money when he was placed on an account with a friend who was passing away. He died one month after adding him to his checking account. The amount is less than 100K and it appears to me that 50% of the funds - $14,000 (2013 rules) would be subject to Gift tax.

    If so, does it matter if he spends down some of the funds on the decessed medical bills?

     

    Thank you for any help...

    Merely putting someone's name on an account does not constitute a gift.  The gift occurs only if funds are withdrawn by the newly named co-owner while the original owner is alive.  The result at death is that your father, as the surviving named owner of the account has inherited the funds in the account.  You would need to consult an attorney as to whether or not there is any legal responsibility to pay the decedent's outstanding debts (medical bills, etc.) that are owed at death.  It's possible that those who are owed the money could pursue payment, in full, from funds that belonged solely to the decedent, prior to death, that are now in your father's possession.

     

    Hope this helps in preparing your returns!

     

    Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal

    Katz, Nannis + Solomon, P.C.

     
  3. You have chosen to ignore posts from thehub. Show thehub's posts

    Re: Gift Tax on joint accounts - help

    In response to MASocietyofCPAs' comment:

    In response to thehub's comment:

    My Dad came into some money when he was placed on an account with a friend who was passing away. He died one month after adding him to his checking account. The amount is less than 100K and it appears to me that 50% of the funds - $14,000 (2013 rules) would be subject to Gift tax.

    If so, does it matter if he spends down some of the funds on the decessed medical bills?

     

    Thank you for any help...

    Merely putting someone's name on an account does not constitute a gift.  The gift occurs only if funds are withdrawn by the newly named co-owner while the original owner is alive.  The result at death is that your father, as the surviving named owner of the account has inherited the funds in the account.  You would need to consult an attorney as to whether or not there is any legal responsibility to pay the decedent's outstanding debts (medical bills, etc.) that are owed at death.  It's possible that those who are owed the money could pursue payment, in full, from funds that belonged solely to the decedent, prior to death, that are now in your father's possession.

     

    Hope this helps in preparing your returns!

     

    Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal

    Katz, Nannis + Solomon, P.C.



    Thank you.

     

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