Today TaxMama® hears from Grace in the TaxQuips Forum, with this charming question. “We have a friend that is dying of terminal cancer and is expected to pass away within 6 months. We will use a web-site that easily allows fund gathering. But we need to know if there are tax consequences to her estate if all the money is not used by the time of her death. Can it be given to her son as joint owner of a savings account? One of the donors is concerned it will get tied up in her estate and get taxed. Is he correct? Can’t people just give money to those in need, without worrying about either issue, since it’s not a really large amount?”
Dear Grace.
That is so sweet of you and your friends.
As long as these people are not looking for a charitable contribution, they are all welcome to help out. They can each give your friend up to $13,000 a year without the giver needing to file a gift tax return. That shouldn’t be a problem, should it?
Set up the account as a joint account with the lady’s son. That way, when she dies, it will automatically be his, without any fuss. How’s that for making things simple?
And remember, you can find answers to all kinds of questions about gifting, and other tax and business issues, free. Where? Where else? At www.TaxMama.com.
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