Before my father passed away, I was authorized to access his bank account and now I am trying to split the inheritance funds between myself and my sibling. After closing the account, the bank will only transfer the funds to me, but they ought to be split evenly between us. If I send half of the funds to my sibling via a cashier's check from my account, which is over $16,000, will either of us incur taxes or be required to report it?
did your father have a will or trust agreement that specified the splitting of that asset or are you doing it to be fair to your sibling?
there are no incme tax consequences.
unless there is a requirement to split the account you are making a gift for the amount sent to your sibling. since it is over $16,000 a gift tax return is required. it is unlikely that any gift tax but you will use up a portion of your lifetime exemption which is currently over $12million
Did you just have transaction authority over a bank account that was owned only by your father, or were you a part-owner of the account? In other words, was your name on the account?
How much money is in the bank account?
What other assets did your father have besides the bank account?
Who is the executor of your father's estate? If it's you, you should read IRS Publication 559, Survivors, Executors, and Administrators, or seek professional help.
He didn't have a notarized Will, but it was his wishes to have everything split evenly.
Otherwise I figured it might be considered a gift and I'm certain we're nowhere near 12mil.
I have full rights to the account, so I believe a co-owner, though possibly only as an authorized user. Otherwise there are no other assets as a part of the inheritance aside from his bank account.
since there is nothing in writing controlling the account and since you had full rights to the account you have made a gift of half the account. so a gift tax return should be filed.
@Orc555 - I am going out on a limb here. and the Community is going to 'shoot me'. Just give the sibling the money your father intended her to have. Life is too short to worry that the IRS is going to come down on you for failure to report a gift because the Bank wouldn't let you write a check giving half to her.
Losing a loved one - especially a parent - is emotional enough. Let's move on.
(and please no responses that this is herasy - I already know)
ps you didn't say whether you were married or how much money we are talking about. But if married, have you and your spouse EACH give her $16,000 now and $16,000 on January 1st and there is no gift reporting required. That covers $64,000.