30 Jun Is money added to a joint account considered a gift?

Q. I am a salaried person and my mother is a homemaker. I have a personal account and a joint account with my mother, and she is the primary owner. If I transfer money from my personal account to the joint account and from there, my mother puts it into a different account, will it be considered a gift or not?
— Curious

A. Adding money to a joint account is not a gift.

“It is only when the joint account holder takes the funds out of the account that a gift is made, and in this case, only to the extent the funds are not returned to the joint account,” said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park. “In the interim, you may consider the funds taken out of the joint account a loan.”

In any event, you are permitted to make a gift of up to $15,000 a year to anyone without any reporting requirements or tax consequences, she said, so if the net amount that is transferred between the accounts is less than $15,000, it is immaterial from a gift or tax perspective.

“If the gift exceeds $15,000 per year, you are required to report it on a gift tax return but until your total gifts — to everyone — during your lifetime exceeds the current estate and gift tax exemption of $11.7 million, there will be no tax,” Romania said.

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This story was originally published on June 30, 2021.

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