Gifts from joint accounts... single or double?

[Frustrated]

My wife and I have a joint checking account. We want to give my future daughter in law money for her wedding. Can we each give her $14,000 from the account ($28,000 total) or would it be restricted to a total of $14,000? If the former, any special need to personalize the money (somehow) first?

The alternative is to give her money from individual investment accounts, but they will be much clumsier.

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[Stuart Bronstein]

Frustrated <wa...@lippman.info> wrote:

> My wife and I have a joint checking account. We want to give my
> future daughter in law money for her wedding. Can we each give
> her $14,000 from the account ($28,000 total) or would it be
> restricted to a total of $14,000? If the former, any special need
> to personalize the money (somehow) first?

There are three basic options, depending on where you live and how
the money in your account was earned.

1. Assuming all the money came from earnings while you were married,
if you are in a community property state you can just write one check
for $28,000 and it will be considered to come from the two of you
equally. No gift tax return will be required.

2. If you live in a separate property state and the money does not
belong to both of equally, you can send in separate checks.

3. If the money is not equally yours, you could send in a single
check from both of you. However in this case you would need to file
a gift tax return and elect gift splitting, where the IRS will treat
the money as coming equally from you both even though in fact it does
not.

--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns

[Frustrated]

On Saturday, September 24, 2016 at 12:07:44 PM UTC-4, Stuart Bronstein wrote:

> Frustrated wrote:
>
> > My wife and I have a joint checking account. We want to give my
> > future daughter in law money for her wedding. Can we each give
> > her $14,000 from the account ($28,000 total) or would it be
> > restricted to a total of $14,000? If the former, any special need
> > to personalize the money (somehow) first?
>
> There are three basic options, depending on where you live and how
> the money in your account was earned.
>
> 1. Assuming all the money came from earnings while you were married,
> if you are in a community property state you can just write one check
> for $28,000 and it will be considered to come from the two of you
> equally. No gift tax return will be required.
>
> 2. If you live in a separate property state and the money does not
> belong to both of equally, you can send in separate checks.
>
> 3. If the money is not equally yours, you could send in a single
> check from both of you. However in this case you would need to file
> a gift tax return and elect gift splitting, where the IRS will treat
> the money as coming equally from you both even though in fact it does
> not.
>

Separate property state. Some is from her SS, some is transferred in from her investment account, some transferred in from my investment account. Impossible to know what the actual split is as money drifts in and out from various sources according to who has a cash surplus.
We can each give a check for $14,000?

[Stuart Bronstein]

Frustrated <wa...@lippman.info> wrote:

> Separate property state. Some is from her SS, some is transferred
> in from her investment account, some transferred in from my
> investment account. Impossible to know what the actual split is
> as money drifts in and out from various sources according to who
> has a cash surplus. We can each give a check for $14,000?

Yes, that should work. In your case the best practice would be to
file a gift tax return and select gift splitting to qualify for the
full exemption. But if you don't keep track of how much each of you
put in that account, and you normally treat it as belonging half to
each of you, that will probably be considered a gift from the one who
contributed more, and be seen as coming half from each of you,
particularly if you write two separate checks.

In any case, it's not a huge violation if you get it wrong - until
the two of you make more than $11 million in gifts that are not
within the annual exemption, there won't be any actual tax anyway.

--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns