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Old 02-20-2016, 02:04 PM
 
674 posts, read 840,365 times
Reputation: 1191

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Last year my dad died and mom moved to an assisted living facility. She transferred a brokerage account over to me to pay her bills from. Within 2 weeks I realized what had transpired (just a mess moving her to my state and changing financial info, getting her into the ALF and paying dad's funeral) I immediately called the brokerage company to transfer it back to her name. I forgot all about that fiasco. Until I got a letter from the brokerage company stating they have an extension in sending us necessary tax forms till March 15. Do I have to declare that money now? Even though it was returned? I can't seem to find any answers online. And is it a gift? I returned it. I can't believe we might have to declare it as income. And pay gift tax Anyone know tax laws or how to figure this mess out?
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Old 02-20-2016, 02:11 PM
 
Location: in the miseries
3,302 posts, read 3,581,865 times
Reputation: 3810
Quote:
Originally Posted by saralvr View Post
Last year my dad died and mom moved to an assisted living facility. She transferred a brokerage account over to me to pay her bills from. Within 2 weeks I realized what had transpired (just a mess moving her to my state and changing financial info, getting her into the ALF and paying dad's funeral) I immediately called the brokerage company to transfer it back to her name. I forgot all about that fiasco. Until I got a letter from the brokerage company stating they have an extension in sending us necessary tax forms till March 15. Do I have to declare that money now? Even though it was returned? I can't seem to find any answers online. And is it a gift? I returned it. I can't believe we might have to declare it as income. And pay gift tax Anyone know tax laws or how to figure this mess out?
Call a cap in your state.

Only answer.
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Old 02-20-2016, 02:15 PM
 
1,109 posts, read 1,820,584 times
Reputation: 4692
She shouldn't have transferred it to you, she should have just added you to the account. Now you have to consult an attorney. Sorry.
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Old 02-20-2016, 02:21 PM
 
674 posts, read 840,365 times
Reputation: 1191
I was always on the account joint with her. Then she took her name off and added my husband for that short time. It was very confusing because I was always on it and didn't give it a lot of thought. It is her account, her social used, I never even knew anything about it!
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Old 02-20-2016, 02:40 PM
 
Location: Great State of Texas
86,093 posts, read 72,534,315 times
Reputation: 27566
Quote:
Originally Posted by saralvr View Post
I was always on the account joint with her. Then she took her name off and added my husband for that short time. It was very confusing because I was always on it and didn't give it a lot of thought. It is her account, her social used, I never even knew anything about it!
The IRS tracks by SS number. The 1099's from the brokerage firm will have her SS number but your name.

Yes, sounds like a mess.
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Old 02-20-2016, 03:19 PM
 
Location: Florida
4,368 posts, read 3,706,500 times
Reputation: 4111
You should be ok from a tax standpoint. Your problem might be working out the red tape.

Your first problem is you were a joint owner of the account. I will assume you contributed nothing to the account and did not use any of the funds for your needs. Thus you would maintain that when your name was added to her account there was no intent of making you a gift of any of the money.

Like wise when she removed her name and added your husbands name there was no intention of making a gift to either of you. You were to pay her bills as she could not.

Then putting it back into her name even helps your case more. If it is in your and your mothers name you should remove your name but you want your mother to give you power of attorney so you can manage the account for her. Call the broker and they can send you the forms.

You could also send a note to the broker telling them the above and asking that the tax forms all use your mothers SS#

By the way your mother would file a gift tax return if the value of the account was over about $14,000 if this was a gift. Since it was not a gift no return is due. Taxes on gifts start over 5 million so I do not think you have a tax problem.

You should be able to handle this on your own. Just be sure to write to the IRS if they question anything you did and note that the assets were always considered 100% your mothers and in fact are now properly titled in her name and you have power of attorney to pay her bills.

If the intention of adding your name to the account was so that you would inherit the account at death you should ask the broker to title the account with a TOD (transfer on death) to x individuals in x%. This is common. The TOD notation will show up in the mailing address for statements etc.

Good luck.
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Old 02-21-2016, 03:31 PM
 
Location: in the miseries
3,302 posts, read 3,581,865 times
Reputation: 3810
Quote:
Originally Posted by luvmyhoss View Post
Call a cap in your state.

Only answer.
Meant accountant.
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Old 02-22-2016, 12:56 AM
 
Location: Out there somewhere...a traveling man.
39,552 posts, read 47,768,430 times
Reputation: 110429
OP a Certified Public Accountant should be able to help you clear up your situation. Otherwise a tax attorney.
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