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What constitutes a gift for tax purposes?

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Sam Alford

Junior Member
What is the name of your state? Ga.
My mother-in-law, who is 86, is considering putting all her assets (CD's, Bank Accounts, etc.) in the names of herself, and her two daughters, with rights of survivorship. The daughters are the sole beneficiaries named in her will. My question is: Does this constitute a gift (and require gift taxes to be paid) to the daughters at the time the accounts are so titled. Income from the accounts would continue to be reported under my mother-in-law's Social Secfurity Number?
My thanks in advance for any inputs on this. SamWhat is the name of your state? Ga.
 


xylene

Senior Member
This is not a an offensive statment but

What is the name of your state? Ga.
My mother-in-law, who is 86, is considering putting all her assets (CD's, Bank Accounts, etc.) in the names of herself, and her two daughters, with rights of survivorship. The daughters are the sole beneficiaries named in her will. My question is: Does this constitute a gift (and require gift taxes to be paid) to the daughters at the time the accounts are so titled. Income from the accounts would continue to be reported under my mother-in-law's Social Secfurity Number?
My thanks in advance for any inputs on this. SamWhat is the name of your state? Ga.
Why?

What is the reasoning behind this transfer of ownership?

What exactly is mom trying to achieve?

The best bet is to talk to a proper estate planner to devise a solid estate plan.

The federal gift tax overview from the IRS is publication 950

HOWEVER estate planning is not a DIY job, especially if significant assets are involved. A well crafted estate plan Vs. a home done self planned affair can in a modest estate be the difference of paying NO tax and paying a small fortune.

It is possible that this plan you describe would be a gift. The amounts, moms exemptions etc... well the actual tax owed depends on so many things. Also NOTE - FILING a gift tax return DOES NOT IN ITSELF mean any gift tax is OWED.

If mom is reluctant to see an estate planner because it acknowledges mortality, tell her to buck up, it doesn't change a thing and nothing feels better than being secure and not paying taxes you don't have to.
 

curb1

Senior Member
Sam,
You seem to be suggesting that this is more than POD accounts. What is she trying to accomplish with this? That is what is important.
 

Sam Alford

Junior Member
The general idea is to pass mothers assets to her daughters without delay, without taxation and lawyer fees and without going thru probate. All worthy goals in my book. I agree with your 3rd sentence, but I was hoping someone here would have some experience to share that would be helpful. Mom has no problem acknowledging her mortality, she's just try to maximize the pass thru to the next generation. Thanks for your input and I did find the tone a bit offensive.
Why?

What is the reasoning behind this transfer of ownership?

What exactly is mom trying to achieve?

The best bet is to talk to a proper estate planner to devise a solid estate plan.

The federal gift tax overview from the IRS is publication 950

HOWEVER estate planning is not a DIY job, especially if significant assets are involved. A well crafted estate plan Vs. a home done self planned affair can in a modest estate be the difference of paying NO tax and paying a small fortune.

It is possible that this plan you describe would be a gift. The amounts, moms exemptions etc... well the actual tax owed depends on so many things. Also NOTE - FILING a gift tax return DOES NOT IN ITSELF mean any gift tax is OWED.

If mom is reluctant to see an estate planner because it acknowledges mortality, tell her to buck up, it doesn't change a thing and nothing feels better than being secure and not paying taxes you don't have to.
 
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divgradcurl

Senior Member
What's with the big concern over probate? There are lot of significant tax advantages to the heirs if you allow the assets to go through probate, and unless the estate is over $2 million or so, not much to worry about from an estate tax perspective. And if you set it up right now, you can probably get through probate without worrying about getting a lawyer involved -- it's only a big deal if the estate plan is messed up, or if the heirs get into a big fight. Follow xylene's advice and have mom talk to an estate planning pro.
 

xylene

Senior Member
Thanks for your input and I did find the tone a bit offensive.
Good.

I hope it jars your clan into the realization that sound estate planning is not a DIY job and realize that your plan may seem penny - wise but is pound foolish and very risky.

Beyond taxation, what about end of life issue and expenses? Its nice to think mom will go quietly in her sleep - but are you sure nursing care won't be an issue? What your plan assumes as wise could be a tax nightmare AND an asset real asset problem.

"avoid lawyers fees" More like 'avoid' them at the front and wind up paying them 10 fold in the rear.

It is so foolish to be making an assumption that you are as good as a professional. If you have to ask if a basic transfer is potentially taxable, you do not know enough to be counting on your plan to save you taxes and from probate.
 

Sam Alford

Junior Member
Dear Xylene,

Just to recap, I posed a simple question. i.e., does the proposed action constitute a gift? I envisioned I might get an answer like, "My cousin's mother did that and the IRS ruled that ....." etc. The closest you came to answering that question was that it might be. DUH! Do you think I would have asked the question if I didn't see that as a possibility? Then you proceeded to provide innocuous answers to questions I didn't ask. By the way, what are your credentials that allow you to tell me what course of action I should take? Do you work for the government or something? Yes I know there are estate planners and I know what they do and have in fact used their services on occasion. I also know there are auto mechanics and that they work on cars but that doesn't keep me from asking others if they ever had a problem I'm experiencing and what did the problem turn out to be. To me that's common sense but that appears to be a rare commodity in this forum. I also know how to find IRS pubs, thank you! And thanks also for advising me what my mother-in-law's state of mind in re her mortality should be. Are you an expert in that area too?

My post to which you responded was my first time to use this forum and probably the last.. Silly me, I thought there would be some well intentioned folks out there who know more than I do on the subject and would give me the benefit of their knowledge. Instead, I find the forum populated by self-indulgent jerks who lurk out there behind their phony names, waiting to pounce on the unsuspecting and show everyone how smart they are. Is this the way you get your jollies? My advice to you is GET A LIFE! If you can't or wont help someone, you're just using up valuable bandwidth, so give it a rest! I hope you recover from your PMS soon.

Affectionately yours, Sam
 

seniorjudge

Senior Member
Why?

What is the reasoning behind this transfer of ownership?

What exactly is mom trying to achieve?

The best bet is to talk to a proper estate planner to devise a solid estate plan.

The federal gift tax overview from the IRS is publication 950

HOWEVER estate planning is not a DIY job, especially if significant assets are involved. A well crafted estate plan Vs. a home done self planned affair can in a modest estate be the difference of paying NO tax and paying a small fortune.

It is possible that this plan you describe would be a gift. The amounts, moms exemptions etc... well the actual tax owed depends on so many things. Also NOTE - FILING a gift tax return DOES NOT IN ITSELF mean any gift tax is OWED.

If mom is reluctant to see an estate planner because it acknowledges mortality, tell her to buck up, it doesn't change a thing and nothing feels better than being secure and not paying taxes you don't have to.
Excellent and accurate advice.
 

tranquility

Senior Member
Just to recap, I posed a simple question.
Part of the law is finding issues. You would be amazed at the number of times I've spent a long time answering simple questions but, once I find out the actual facts, all the answers were wrong. The questions were irrelevant and my answers mislead. So, save your outrage for someone you pay to not give you advice as advice is more than answering the questions asked by people who are ignorant on the matter.

But to answer your question, as I don't want to have you think harshly of me and leash a torrent of invective, yes. When you give something it is a gift.
 

Sam Alford

Junior Member
well no, you really didn't. I didn't ask "When you give something is it a gift?" Re-read my original post, or have someone read it to you, if you continue to have problems with it. But thanks for pointing out that the forum is called "freeadvice". I really hadn't dwelt on that. I sure am glad that its not called "freeadvice and underwear" else I'd be up to my neck in underwear that I didn't ask for or want.

Well, it's been pleasant chatting with you, but I grow weary of having a battle of wits with the witless. Since it's obvious that there will be nothing useful to me coming from this forum, I will make my exit and bid you adieu. In honor of St. Patrick's day, let me paraphrase an old Irish saying, "May the road of life rise up to meet your face!" Do have a good life.
 

tranquility

Senior Member
well no, you really didn't. I didn't ask "When you give something is it a gift?" Re-read my original post, or have someone read it to you, if you continue to have problems with it.
I agree. What you asked was:
My question is: Does this constitute a gift (and require gift taxes to be paid) to the daughters at the time the accounts are so titled.
My answer was:
yes. When you give something it is a gift.
Sorry, I can't answer if taxes would be paid without asking other questions. Which would not be allowed in your theroy of how we are to behave.
Well, it's been pleasant chatting with you, but I grow weary of having a battle of wits with the witless
And yet I know the advice you want and you do not. You focused on being smart and directing the conversation and offended people who do this every day. You ignored sound advice and direction and felt "wit" was a wonderful thing except that it did not get you the knowledge you needed.

Final answer, when you started this thread, you were ignorant. But now since you had the opportunity to get the information you wanted, but refused by acting like a know it all who barely tolearated input, you still don't know it. You have changed your ingnorance to stupidity by pride. Well done.
 

Sam Alford

Junior Member
Well Golly Gee, Mr. T, you sound a bit less than tranquil today! Was it something I said? Or did you get up on the wrong side of the rock today? And was that a string of invectives you unleashed at me? My, My, keep this up and you'll need to change your alias to "Hostility." But really, I love it when you talk dirty to me!

Lest you think me inattentive, I did pick up on the fact that you quotated me out of context in order to make your point. Does this mean you've given up on using truth and logic?

As to you knowing the advice I want and I don't, etc.. I keep trying to tell you I didn't request advice, I asked for info but you still don't get it. But no matter, I obtained the info I wanted from my local EP before you dipped your oar into this particular pond. Since then I've just been messing with your mind. Why? Just because you made it so easy and I enjoy poking holes into the smug and pompous. Just for the record, my EP answered my question easily, quickly, and graciously without even a trace of the boorishness I've experienced here. Maybe thats why she's so successful that she doesn't have to troll the internet for customers.

I'm sorry we got off on the wrong foot with each other. Under other circumstances, we might have become good friends. You know, like if we were the last two on earth and you happended to be a woman. I'll give you the last word if you want it but do try to get a grip and maintain your professional demeanor. I hope it doesn't spoil your fun that I wont be here to hear you, but maybe you can continue trying to impress your peers. Ciao, baby.
 

tranquility

Senior Member
Some questions:
1. What is an EP?
2. Did he say "yes" to your question?
3. If I took your question out of context, what was your question (in context) other than the one I answered?
 
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