08 Apr Do I have to file a gift tax return after mom died?

Q. Several years ago after my father passed away, my mother added me as a joint owner on several of her bank accounts. After she passed away in late 2024, I changed the title of many of the accounts to reflect me as the sole owner. Following my parents’ instructions, I split the funds from these accounts evenly with my sibling. Does my mother’s estate need to submit a gift tax return for the funds I later owned after removing my late mother from the accounts? Do I need to submit a gift tax return for the funds I shared with my sister? The amounts exceed the annual gift exemption but are far below the lifetime exemption.
— Unsure

A. We’re sorry to hear about your mother.

Here’s what you need to know.

When your mother named you as the joint owner of the bank accounts, she actually made a gift to you of one half the account, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

“However, it is possible that during your mother’s lifetime and upon her death you acknowledged you were named on the account solely for your mother’s convenience, never withdrawing sums for your own use, and upon your mother’s death, you acknowledged the entire account was part of her estate to be shared with your sibling thus negating the presumption of a gift by your mother,” she said.

If you had immediately transferred the funds into an estate account to share with your sibling, you may have avoided the need to file the IRS Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, she said.

But once you transferred the funds into your own account, they became your funds, Romania said.

You then made a gift of a portion of the funds to your sibling.

“To the extent the amount gifted exceeded the annual exclusion of $18,000 per donor per donee ($36,000 per married couple) in 2024 or $19,000 per donor per donee ($38,000 per married couple) in 2025, Form 709 is required to be filed, although no tax is owed unless you exceed your federal estate and gift tax exemption which is currently $13.99 million,” Romania said.

Depending on the amount in the account, you may have been able to spread the gifts over multiple years so as to avoid the need to file Form 709, Romania said.

“Filing of Form 709 is due by April 15th of the year following the gift, unless an extension is obtained,” she said. “However, if there is no tax due, there is no penalty or interest assessed for a late filing.”

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This story was originally published in April 2025.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.