My inexperience may have led me into a bit of a sticky situation, so I'm hoping someone will have some advice on how I (hopefully) can fix this:- My mom had a CD worth around $50,000. She added me on it as a joint account owner, as she's getting older and needs help managing her finances.-==>In this case, there is something techincal to consider. Since you were made a joint owner on an account which had only your mother's funds and to which you did not contribute any funds at that time.Then, if the amount in the account at the time you became a joint owner exceeded $14K (for 2016-17, but earlier years had lower thresholds), then your mother had an obligation to file an IRS Form 709 Gift Tax Return to report a "gift" to you of one-half of the account value ofn $25K exceeding $14K. That is because the act of you becoming joint owner is considered your mother "giving" you one-half of the account's value at that tim then your mother has made a gift and needs to file form 709 with the IRS.
When the CD matured, I went into the bank by myself, opened a new money market account, and then transferred the $50,000 from the CD to this account, so that she would have liquid funds to tap into.- The only snafu was that my mom wasn't with me, so I was only able to add her as a beneficiary on this new money market account. === All money market acct. income is subject to the same tax rate, no matter how it?s labeled. The income your mom receives from a money market is classified according to whether it?s from a bank money market account or a money market mutual fund. Bank money market account income is reported as interest on Internal Revenue Service Form 1099-INT, whereas mutual fund money markets send you IRS Form 1099-DIV, which lists your dividend income.
They needed her to go into the bank in person to be added as a joint account owner.After I got home, I realized that because the money market account is in my name, she's probably going to get hit with a gift tax now. So my question is this:If I take my mom back to the bank and add her as a joint account owner, and then have her take over as the primary account owner, will we be able to avoid the gift tax?==>perhaps then you at this time need to file form 709 with the IRS since you add up your mother to the money market fund acct. owned by you.
If not, is there anything we can do retroactively? I'm kicking myself pretty hard right now for not realize what I'd done, and I reeeeeeally hope there's a solution here======>>I guess. as mentioned previously. you do not do anything retroactively