Should my Mom make me co-owner of her CD?
January 29, 2007
From: Barb and Tom
Date: Fri, 08 Dec 2006
Mom has a $150,000 CD maturing soon and she wanted to put my name on the new CD as a co-owner, with the earnings being reported under her social security number and tax return. Would $75,000 be a taxable gift? If either of us died, would only one-half be included in the decedent's estate?
Date: Fri, 29 Dec 2006
Hello Barb and Tom,
I don't think your mother should make you the joint owner of the account.
$75,000 would be a taxable gift. You would be taxable on one- half of the interest, even though it's reported under your mother's social security number.
All of the account could be included in your mother's taxable estate, and one-half would be included in yours.
As an alternative, your mother should consider having the account set up as a "totten trust" account, under her social security number. You would automatically inherit the account at her death, and the interest income would be taxable to her.
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