Mother establishes a joint bank account for herself and Arlene, her daughter. Under the account, either...
Mother establishes a joint bank account for herself and Arlene, her daughter. Under the account, either may withdraw funds. Mother deposits $15,000 to the account. Is there a gift for tax purposes when the money is deposited? If not, when would there be a completed gift?
Homework Answers
Background : When you give money or any other asset to people, it might be subject to gift tax. However most transactions are not subject to gift tax. The only purpose of establishing gift tax is to avoid prevent citizens from avoiding paying taxes.
Answer :
No it is not a gift for tax purposes when the money is deposited. Establishing a joint account, adding some money and merely adding her daughter as the joint owner of the account does not establish it as gift to be covered under the umbrella of "gift tax".
However it would be treated as "gift" for the purpose of gift tax when the funds amounting to 15,000$ are withdrawn by her daughter, Arlene.
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