Joint Account Gift Tax

[vealeqan85]

Situation is a joint account where a second, non spouse was added to the original account (parent/child). The original account holder has contributed most/all of the funding of the account; if the second holder uses the account to make a down-payment in excess of the annual exemption for gifts, with full agreement from the original account holder, does the original account holder now need to file a form 709? Should the second holder record the funds of the down-payment as a gift on the mortgage application, though technically as a joint account holder they also own the funds? 

[M-MTax]

Yes and yes. A gift is made as soon as the funds are withdrawn by the second account holder. 

The mortgagee may require a gift letter. 

[Alex_Cobe]

If the second account holder uses the funds to make a down payment that exceeds the annual gift limit, the original account holder may be required to file Form 709.
However, the exact rules depend on a number of factors, such as the amount of the gift, the degree of relationship between the account holders, and the laws of the state in which the property is located.

[M-MTax]

the exact rules depend on a number of factors

Except we already know the gift exceeds the annual exclusion amount because more than that was withdrawn for the down payment, it is a non-spouse relationship (parent/child), and the original account holder contributed the funds. So it's sort of a no-brainer that a 709 should be filed.