Is this gift taxable income?

[Susan]

My father owns a Certificate of Deposit that also has my
name on it (worded like "John Jones or Susan Jones"). He
wants to give it to me as a gift, so when it matures we'll
just transfer the funds into my savings account at that same
bank.

Is this taxable income? My name is on the CD with his, so
perhaps in a legal sense it's already my money and I'm just
transfering it from one account I own to another.

But on the other hand, the bank has always sent the 1099 to
my father, not me, since his name is listed first, so maybe
the IRS would regard it as new income for me that's taxable.

Is it taxable income? Will the bank report the transaction
to the IRS?

Thanks,

Susan

 

[Phil Marti]

My father owns a Certificate of Deposit that also has my
name on it (worded like "John Jones or Susan Jones"). He
wants to give it to me as a gift, so when it matures we'll
just transfer the funds into my savings account at that same
bank.

Is this taxable income?

Gifts are never taxable income. If annual gifts to one
person exceed $11,000 a gift tax return may be required, but
that's the donor's responsibility. If your father does give
you this account, be sure to give the bank a new Form W-9 so
they'll report future interest payments under your SSN
rather than his.

Phil Marti
Topeka, KS

 

[Barry Margolin]

My father owns a Certificate of Deposit that also has my
name on it (worded like "John Jones or Susan Jones"). He
wants to give it to me as a gift, so when it matures we'll
just transfer the funds into my savings account at that same
bank.

Is this taxable income?

Gifts are never taxable to the recipient. They may result
in the giver having to pay gift tax, if they exceed the
annual $10,000/recipient limit.

 

[BILLW]

My father owns a Certificate of Deposit that also has my
name on it (worded like "John Jones or Susan Jones"). He
wants to give it to me as a gift, so when it matures we'll
just transfer the funds into my savings account at that same
bank.

Is this taxable income? My name is on the CD with his, so
perhaps in a legal sense it's already my money and I'm just
transfering it from one account I own to another.

But on the other hand, the bank has always sent the 1099 to
my father, not me, since his name is listed first, so maybe
the IRS would regard it as new income for me that's taxable.

Is it taxable income? Will the bank report the transaction
to the IRS?

Gift income isn't taxable to the receiver. If any taxes are
due, the giver is required to pay the tax if due.

bill

 

[Stuart O. Bronstein]

(e-mail address removed) (Susan) writes:

Gifts are never taxable income. If annual gifts to one
person exceed $11,000 a gift tax return may be required, but
that's the donor's responsibility. If your father does give
you this account, be sure to give the bank a new Form W-9 so
they'll report future interest payments under your SSN
rather than his.

That bears repeating. The gift of the CD itself is not
subject to income tax (but could require a gift tax return
to be filed).

But any income earned by the CD is included in your income
tax from the date of the gift.

Stu