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My mother passed away May 18, 2018 at age 92. I am to

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My mother passed away...

My mother passed away May 18, 2018 at age 92. I am to inherit 50% of her portfolio, valued at $849,000. When my mother moved to CA from FL in 2010, she had the portfolio set up jointly with my sister, so that my sister could act for her. My sister is the executor. The April Statement is jointly between mother and sister. My sister has been told that my mother's name has been removed upon mother's death, and setting up a new account for me alone, and transferring 50% to that account means that gift tax applies. Does gift tax on $409,500ish mean that I have to pay it, or because it is well under $11 million, does the exemption apply, and the only thing I will need to know is to fill out a gift tax form, and pay no gift tax through the exemption? Please advise -- I don't want to lose up to 40% of my inheritance. Thanks.

Accountant's Assistant: Which tax year are you filing for?

2018

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Is choosing the portfolio over liquidation the smarter move?

Submitted: 2 months ago.Category: Tax
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5/28/2018
Tax Professional: emc011075, Tax adviser replied 2 months ago
emc011075
emc011075, Tax adviser
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Hi. My name is ***** ***** I will be happy to help you.

Asset transferred to you after death of the original owner is inheritance, not a gift. No gift tax return is required.

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Tax Professional: emc011075, Tax adviser replied 2 months ago

Your sister received her portion as a gift when her name was put on the portfolio along with your mother while your mom was still alive. Anything that belonged to your mother and was transferred to you after her death is inheritance, not subject to gift tax rules. Any asset transferred to your from your sister would be treated as a gift. As a recipient of inheritance or a gift you are not required to report anything. Your sister would have to file a gift tax return to report a gift to you (if she made one).

The gift tax return and any gift tax is always filed/paid by the donner, not the receiver of the gift.

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Tax Professional: emc011075, Tax adviser replied 2 months ago

Any questions? If you received any gift over 15K from your sister than your sister will have to file a gift tax return and as long as she did not gift more than 11M during her lifetime she will be able to use the lifetime exclusion. But she will still need to file a gift tax return. Any gifts below 15K annual exclusion does not need to be reported.

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