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Hypothetically speaking lets say me and my father ...

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Hypothetically speaking let''s say me...
Hypothetically speaking let''s say me and my father have a joint checking account. Say he deposits $15K in this joint account this year. Now I move this amount into my personnal account(Me being the only holder). What are the tax ramifications? If so which IRS forms should I fill ? Can my father move the same amount into our joint account next year?
Submitted: 9 years ago.Category: Tax
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6/3/2008
Tax Professional: Marvin,EA, Enrolled Agent replied 9 years ago
Marvin,EA
Marvin,EA, Enrolled Agent
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Hello and thank you for using Just Answer. This action can take several forms. The action can be a gift to you because your father deposit the $15,000 into the checking account this year. There is a $12,000 exclusion per person per year so you father will file a gift tax return (Form 709) for the balance of $3,000. If the $15,000 was left in the account for over one year the amount could be divided over years and no gift tax would be due. You can treat the $15,000 as a gift from both parents and no git tax return would be due.

An individual doesn't make a gift when he opens a joint bank account with his own funds for himself and another under the terms of which he can regain the entire fund without the other's consent. A gift is made only when the other person withdraws money for his own benefit (Reg 25.2511-1(h)(4)).

Marvin,EA
Marvin,EA, Enrolled Agent
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Customer reply replied 9 years ago
What would happen if that amount was $75K and that my Father does not live in USA
Customer reply replied 9 years ago
Relist: I still need help.
Tax Professional: Marvin,EA, Enrolled Agent replied 9 years ago
The gift tax rules apply to a U.S. citizen or resident no matter where the gift property (tangible or intangible) is situated. (Code Sec. 2501(a)). Your father would file a gift tax return for $63,000 ($75,000 - $12,000 = $63,000) if you was to withdrawal the $75,000.
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Customer reply replied 9 years ago
Reply to Marvin,EA's Post: How is this possible, my father is neither a US citizen nor resident. So how is gift tax applicable here?
Tax Professional: Marvin,EA, Enrolled Agent replied 9 years ago

Gifts from a nonresident alien or foreign estate, reporting is required only if the aggregate amount of gifts from that person exceeds $100,000 during the tax year.

You would not have to report the $75,000 if you transfers the amount to your banking account.

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