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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15738
Experience:  15years with H & R Block. Divisional leader, Instructor
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My father before his death had two checking accounts. One

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My father before his death had two checking accounts. One in the amount of 15000 and the other in the amount of 50000. He added my sister and I as joint owners because he said if he needed something he wanted us to be able to go and get it for him, etc. His will stipulated that all property to be split 50/50. I told the banks of his death and they said that since we were co-owners it passed outside of probate.

My question is if the above was correct: Is the money in the checking accounts a gift or inheritance? His estate was less than(NNN) NNN-NNNNin 2011. If we remove any or all of the money does it trigger a gift tax, etc.

One other note. I am about to purchase my sister's interest in some land we inherited together by giving her fair market value. I am going to use funds from my own personal checking account to purchase it. Would it be suspicious if we still shared a joint account together, with the thought that we were avoiding a gift tax?

Robin D. :

Hello and thank you for using Just Answer,
Please accept my condolences on your loss. The amount in the checking account was a gift on the day your father added your names. Your father would have been required to report in the year of the gift any amount over the yearly limit. That would still not mean tax would have been owed. He did have a lifetime limit (now just over $5mil) that could have been used to exclude form tax.

Robin D. :

The removal of the money would not trigger gift tax now.

Robin D. :

The purcvhase of the property interest from your sister would not be suspicious. Your sister though needs to remeber to file the sale on her tax return. even if a loss.

Robin D. :

A little more on gift taxes. The receiver does not pay the tax.

Robin D. :

The giver pays (generally). But the giver has not only the yearly limits they also have their lifetime limits so rarely is gift tax actually owed.

Customer:

since my father put us on the accounts in 2011 and died about 6 months later that same year, should one of us filed a gift tax return for him

Robin D. :

Yes, the form 709 would need to be completed for the tax year of the gift.

Customer:

would it be prudent to go back at this later time and do one? no tax should be involved but from what I read the return has to be done.

Robin D. :

Yes, the return does need to be filed.

Customer:

ok. thank you

Robin D. :

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