Arlington, VA asked in Tax Law for Virginia

Q: Tax consequences of adding adult child as Joint Account owner to an elderly parent’s existing savings account.

What are the tax consequences of adding an adult child as a Joint Account owner to an elderly parent’s existing savings account? Would a withdrawal from the Joint account by the adult child fall under the gift tax, or would it be considered a shared asset?

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1 Lawyer Answer

A: Yes. Try looking at it this way: If an elderly parent gives the adult child $30,000 in cash, that gift would have to be reported as a gift--on both returns. The same rules apply to savings accounts, or any other gifts.

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