[jj267]

For 10 or so years I had a savings account with my name being the primary SSN and my parents secondary (so we could all deposit and withdraw if we want). We recently had a 6 month cd with a large amount of the savings in it that was up last Thursday. I wanted to transfer a significant portion of that money to them so on Monday I took that large amount and transferred it into a 6 month cd with my father now being the primary SSN and my mother and me below it - so only the primary was switched but same 3 people on it with withdrawal and deposit privaledges. My mother read an article in the paper a day after that about gift taxes and how you have to pay taxes if its more than $12,000. So yesterday I called the bank and explained the situation and they had that total amount in the CD including the interest it made for those 4 days transferred back into a CD with my name back to the primary SSN and my parents below it. So the bank had to close out the CD book with my dad as primary and opened a new one with me as primary - said they couldn't just transfer the primary name on the same book.

I talked to 2 accountants and they said we both would not have to file a gift tax since there was no gift... it now is back to me as primary within a few days.. the only thing is that my dad will get a form for the interest. All 3 of us were always on each CD (joint) every single time and none of us withdrew.

Is this correct? I am sure you can see my anxiety that within 4 days we could lose this entire savings almost in taxes.

[AtlantaTaxExpert]

Yes, that is correct. You CAN change your mind on a gift.

However, the exact amount of the transfer would be helpful.

[jj267]

Great Thanks for the response! I appreciate it.

[jj267]

Great Thanks for the response! I appreciate it.

[AtlantaTaxExpert]

Glad to help!

[MukatA]

The interest income is taxable even if you do not withdraw it. Normally it is reported on 1099-int issued by the bank.

About Gift tax, read Your U.S. Tax Return: The U.S. Gift Tax