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Joint Account-Gift Tax

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whatleyham

Junior Member
What is the name of your state? New York

I have a question about "gifting." I have a joint brokerage account with my adult son. However, the money is really all his. This was set up for convenience, since for many years he lived overseas. I would now like to close the account since he now lives in the US, so he can set up an account with only his name on it.

The advisor said there's a chance the IRS will consider the removal of my name as "gifting" my assets to my son and will, therefore, incur taxes. My financial advisor told me that I should write and sign a brief note stating that the assets are entirely my son's, and then have a lawyer look over the note.

Is it necessary to see a lawyer about this?

What are the chances I would be audited, even though the money is not mine? We don't have records to substantiate that the money is not mine, except for my son's tax returns showing his income.
 


LdiJ

Senior Member
whatleyham said:
What is the name of your state? New York

I have a question about "gifting." I have a joint brokerage account with my adult son. However, the money is really all his. This was set up for convenience, since for many years he lived overseas. I would now like to close the account since he now lives in the US, so he can set up an account with only his name on it.

The advisor said there's a chance the IRS will consider the removal of my name as "gifting" my assets to my son and will, therefore, incur taxes. My financial advisor told me that I should write and sign a brief note stating that the assets are entirely my son's, and then have a lawyer look over the note.

Is it necessary to see a lawyer about this?

What are the chances I would be audited, even though the money is not mine? We don't have records to substantiate that the money is not mine, except for my son's tax returns showing his income.
I don't agree with the advisor. As long as your son reports the full capital gains and pays the full capital gains tax on any monies withdrawn/transactions there shouldn't be any tax issues. It would not trigger an audit.
 

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