[DCResident1806]

Hi all, can you help me on this issue?

If a green card couple set up a joint account, wife was the only party contributing and withdrawing the funds when the account existed. Would the contribution and/or withdrawal be considered as gifting? Thank you.

[ebaines]

No - gift taxes do not apply to gifts or money transfers between spouses.

[DCResident1806]

No - gift taxes do not apply to gifts or money transfers between spouses.

I checked with the IRS rule, it seems that the case you mentioned only applies to the spouses who are both US citizens. What if both couple are green card holders?

[ebaines]

To be honest I hadn't considered this before. I found this article which suggests that for non-US citizens the marital gift tax exclusion is $148K for 2016: https://www.thebalance.com/what-is-a...n-gift-3505671

Also from page 2 of the instructions for Form 709, "US Gift (and Generation-Skipping Transfer) Tax Return," for tax year 2015 is this:

"Gifts to your spouse. You must file a gift tax return if you made any gift to your spouse of a terminable interest that does not meet the exception described in Life estate with power of appointment, or if your spouse is not a U.S. citizen and the total gifts you made to your spouse during the year exceed $147,000."

So if you make a gift to your spouse that exceeds this number it would trigger form 709. You may not actually owe any gift tax, but the form must be filed.

[DCResident1806]

To be honest I hadn't considered this before. I found this article which suggests that for non-US citizens the marital gift tax exclusion is $148K for 2016: https://www.thebalance.com/what-is-a...n-gift-3505671

Also from page 2 of the instructions for Form 709, "US Gift (and Generation-Skipping Transfer) Tax Return," for tax year 2015 is this:

"Gifts to your spouse. You must file a gift tax return if you made any gift to your spouse of a terminable interest that does not meet the exception described in Life estate with power of appointment, or if your spouse is not a U.S. citizen and the total gifts you made to your spouse during the year exceed $147,000."

So if you make a gift to your spouse that exceeds this number it would trigger form 709. You may not actually owe any gift tax, but the form must be filed.

Thank you for your input. So back to my question, is contribution to a joint account considered as gifting? Thank you in advance for your advice.:)

[ebaines]

The creation of a joint account is not a gift event, nor is it a gift when one spouse contributes money to the account. However, if one spouse withdraws a larger amount of money than he/she put in, the excess is considered a gift. So you can avoid gift tax issues if the spouse who makes the most contributions is also the spouse who makes the most withdrawals (i.e. writes the checks).

For reference, see: http://budgeting.thenest.com/gift-ta...nts-32922.html

[DCResident1806]

The creation of a joint account is not a gift event, nor is it a gift when one spouse contributes money to the account. However, if one spouse withdraws a larger amount of money than he/she put in, the excess is considered a gift. So you can avoid gift tax issues if the spouse who makes the most contributions is also the spouse who makes the most withdrawals (i.e. writes the checks).

For reference, see: Gift Tax Rules & Joint Bank Accounts - Budgeting Money

Thanks a ton!! It is really helpful.