Gift?

[NinjaBadger]

I'm planning to open a joint savings account with my daughter as primary account holder and I will be the sole contributor. I would withdraw my name from the account after a couple of years. Is it considered as a gift?

 

[PayrollHRGuy]

Any funds that you have put into the account and that she withdraws before you remove your name and all funds once you remove your name will be a gift. I'm curious what else you think it could be.

 

[NinjaBadger]

Any funds that you have put into the account and that she withdraws before you remove your name and all funds once you remove your name will be a gift. I'm curious what else you think it could be.

She's planning to go back to college to get her master degree. The fund is for her to pay for school, gas, food and whatever else she needs. I would like her to have some money in the account may be less than 10K when she finished and I do not want my wife to touch it. Just wondering if the bank reports to IRS. Thanks!

 

[PayrollHRGuy]

Any cash transaction of 10K or more is reported to the IRS. But that shouldn't be a problem for you.

 

[NinjaBadger]

Any cash transaction of 10K or more is reported to the IRS. But that shouldn't be a problem for you.

Thank you! I'm assuming less than 10K annually.

 

[LdiJ]

Any funds that you have put into the account and that she withdraws before you remove your name and all funds once you remove your name will be a gift. I'm curious what else you think it could be.

I disagree. With a joint bank account any money in the account equally belongs to both parties, therefore it is NOT a gift when it is withdrawn. It could perhaps be considered a gift when it is deposited into the account, based on intent, but even then the government would be hard pressed to prove it a gift for tax purposes.

 

[davew9128]

I disagree. With a joint bank account any money in the account equally belongs to both parties, therefore it is NOT a gift when it is withdrawn. It could perhaps be considered a gift when it is deposited into the account, based on intent, but even then the government would be hard pressed to prove it a gift for tax purposes.

I agree completely, but what is odd is that the OP's responses to questions are all over the place. Aside from the effectively non-existent tax issue, I see all sorts of OTHER personal problems here.

 

[NinjaBadger]

I agree completely, but what is odd is that the OP's responses to questions are all over the place. Aside from the effectively non-existent tax issue, I see all sorts of OTHER personal problems here.

Wow, you're sharp! My wife is not my daughter's birth mother, she disagrees with my plan and her reason is that my daughter already have a bachelor degree she should be able to support herself. She's my daughter and I want her to spend all energy in school. One way or another, I'll support my daughter!

 

[PayrollHRGuy]

I disagree. With a joint bank account any money in the account equally belongs to both parties, therefore it is NOT a gift when it is withdrawn. It could perhaps be considered a gift when it is deposited into the account, based on intent, but even then the government would be hard pressed to prove it a gift for tax purposes.

Not that it really matters for this OP because of the amounts in question but I have to disagree. Let's say I open an account in my name and deposit $100,000,00 (to make sure we get to an amount that the IRS will actually care about.) Other than the notification of the cash transaction there is no issue that the IRS need know about assuming I can explain where the $100 mil came from.

If I then add your name to the account again because you have not accessed the account you have not yet received any gift. You may not even know I added your name.

But when you start pulling money out it becomes a gift. Maybe the entire amount or maybe just what you have withdrawn. We'd have to get down in the weeds for that.

 

[PayrollHRGuy]

Thank you! I'm assuming less than 10K annually.

Actually no, it is any $10K + cash transaction. It is an anti-money laundering law.

 

[adjusterjack]

An argument can be made that it's a gift or an item of support. Doesn't matter. $15000 or less per year is not reportable to the IRS. Over $15,000 is reportable on a gift tax return but no tax is payable by anybody until you've reached the lifetime gift tax exclusion which is currently $11,700,000.

Your bigger problem is your wife. Unless you have money stashed away as your sole and separate property from before you married her, you will be using marital funds. Every nickel that you and she earned or own are marital funds and she certainly has a say in how you spend her money on her stepdaughter.

If you are going to do it without her consent you are likely to have marital problems coming up real soon.

My former wife chose her son over me (stepfather) and the marriage soon ended in divorce.

Personally, I agree with your wife. Your daughter is an adult with a bachelor's degree. If she wants an advanced degree she ought to be able to pay for it herself.

Choose wisely.

 

[LdiJ]

An argument can be made that it's a gift or an item of support. Doesn't matter. $15000 or less per year is not reportable to the IRS. Over $15,000 is reportable on a gift tax return but no tax is payable by anybody until you've reached the lifetime gift tax exclusion which is currently $11,700,000.

Your bigger problem is your wife. Unless you have money stashed away as your sole and separate property from before you married her, you will be using marital funds. Every nickel that you and she earned or own are marital funds and she certainly has a say in how you spend her money on her stepdaughter.

If you are going to do it without her consent you are likely to have marital problems coming up real soon.

My former wife chose her son over me (stepfather) and the marriage soon ended in divorce.

Personally, I agree with your wife. Your daughter is an adult with a bachelor's degree. If she wants an advanced degree she ought to be able to pay for it herself.

Choose wisely.

This is another one where I agree to a great extent, but not necessarily a blanket agreement. There isn't enough information on this thread to say one way or another as far as I am concerned.

 

[NinjaBadger]

An argument can be made that it's a gift or an item of support. Doesn't matter. $15000 or less per year is not reportable to the IRS. Over $15,000 is reportable on a gift tax return but no tax is payable by anybody until you've reached the lifetime gift tax exclusion which is currently $11,700,000.

Your bigger problem is your wife. Unless you have money stashed away as your sole and separate property from before you married her, you will be using marital funds. Every nickel that you and she earned or own are marital funds and she certainly has a say in how you spend her money on her stepdaughter.

If you are going to do it without her consent you are likely to have marital problems coming up real soon.

My former wife chose her son over me (stepfather) and the marriage soon ended in divorce.

Personally, I agree with your wife. Your daughter is an adult with a bachelor's degree. If she wants an advanced degree she ought to be able to pay for it herself.

Choose wisely.

Thank you for your reply. I guess I'll have to reconsider my plan and have a talk with the wife.

 

[davew9128]

But when you start pulling money out it becomes a gift. Maybe the entire amount or maybe just what you have withdrawn.

If used to pay the OP's daughter's grad school tuition directly, its not even a reportable gift.