How can I avoid a gift tax I accidentally triggered?

[dennishhong]

My inexperience may have led me into a bit of a sticky situation, so I'm hoping to get some advice on how I (hopefully) can fix this:

• My mom had a CD worth around $50,000. She added me on it as a joint account owner, as she's getting older and needs help managing her finances.
• When the CD matured, I went into the bank by myself, opened a new money market account, and then transferred the $50,000 from the CD to this account, so that she would have liquid funds to tap into.
• The only snafu was that my mom wasn't with me, so I was only able to add her as a beneficiary on this new money market account. They needed her to go into the bank in person to be added as a joint account owner.

After I got home, I realized that because the money market account is in my name, she's probably going to get hit with a gift tax now. So my question is this:

If I take my mom back to the bank and add her as a joint account owner, and then have her take over as the primary account owner, will we be able to avoid the gift tax?

If not, is there anything we can do retroactively?

Thanks in advance!

[Critter]

Just take her to the bank and get it fixed. 

[dennishhong]

Right, but what exactly is the fix? The reason I wanted to check beforehand is because my mom isn't particularly mobile, and a trip to the bank is no easy task. I also tried asking the banker who helped me, but he wasn't very clear, and honestly, I'm not sure he himself knows what the tax situation is going to be. Ideally, I'd like to go in there with a solution already, rather than rely on the bank to tell me what I need to do.

[VolvoGirl]

The gift tax was triggered when she added your name to the CD.  Even though she might have to file the gift tax return there won't be any tax due on it.

[dennishhong]

Great, thanks. That opens up a whole 'nother can of worms on how exactly the gift tax return works, but I'll do some research on it. 🙂

[Critter]

I am truly surprised the banker doesn't let you take a signature form home for her to sign  since they already had her signature on file to compare to.

[VolvoGirl]

See, <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3151442-where-do-i-report-a-cash-gift">https://ttlc.intuit.com/que...>

[dennishhong]

He hasn't been particularly proactive with offering advice (which is why I'm here), but I'll ask specifically if I can do this. Thanks for the tip!

[Hal_Al]

  "Gift Tax" is somewhat of a misnomer.  Even though a gift tax return may be required, very few people ever actually pay federal gift tax. The purpose of the gift tax return is usually only to document a reduction in the allowable estate tax exemption.
See https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/... 

When she made you a joint owner, she effectively gave you a gift of $25,000

[dennishhong]

Ah, I see. Yep, I'm reading up on this now, and it's starting to make more sense. Thank you!