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Gift from joint Canadian account

My father, a resident and citizen of Canada, would like to give us a gift of money. The funds are currently being held jointly with me in a Canadian bank account. My family and I reside in the state of Maryland. 1) Since the money is in both our names, does the IRS still consider this to be a "gift" and would there be any tax implications if the amount were over $10,000 US? 2) If so, would it matter if I were to directly withdraw the funds myself or if the amount is in Canadian dollars? 3) If a portion of this money was to be set aside for our six month old's college education, should the funds be separated into two parts or transactions?

Reply to
Andrew Wasyluszko
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Your father is a citizen and resident of Canada. He is not subject to Gift Tax.

You are the recipient of the gift - Gift Tax is payable by the giver, not the recipient. You do not need to do anything.

All other points are moot in light of that.

Reply to
parrisbraeside

Other than the last which isn't dependent on the first two at all -- for that portion you might want to look into 529 plans. There could be some local state tax savings available in that route (not related to the gift per se, but against other income)...

Reply to
dpb

1) No gift is made when your father puts the funds into a joint account. The gift is made when you withdraw the funds. Your father is not a U.S. citizen or resident. Thus, as long as the gift occurs outside the U.S., no gift tax should be due regardless of the size of the gift. If the gift exceeds $100,000, then it should be reported by you on Form 3520, Part IV. 2) You should not withdraw the funds from a U.S. branch of the bank or the IRS may be able to argue that the gift occurred in the U.S. and U.S. gift tax could be due. 3) There is no need to separate anything as long as the gift takes place outside the U.S.
Reply to
jmail7

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