My mom, age 73, just sold her house netting $150k She wants me to manage her $150K. Can I put the $150k in my bank account without paying income or any other tax?

[thomas-fox]

My mom, age 73, just sold her house. She is expected to net $150,000 from the sale of her house. Her income is $2800 a month. I am going to assist her with moving into an assisted living complex. She wants me to manage her $150,000 for her. Here is my question: When mom receives the check for $150k do I put it in a bank account in my name, mom's name, or joint mom's and my name or something else? I fear that If i put in an account in my name the $150 will be considered income and I will have to pay tax on it BUT I will have full control of money. If I put it in mom's name then I may have NO control of it. I'm not sure of the complications if the back account is in both our names when she dies.

[Hal_Al · Accepted solution]

From a tax standpoint, you want the account in her name; so the income and capital gains will be taxable to her. I assume she is in a lower tax bracket than you.

If the account is in her name, the investments (appreciated stocks and mutual funds) will "step up" in cost basis when you inherit them.

These days, with internet investment trading, you can easily access her account for investment purposes. You may want to have her execute a power of attorney for you. 

You should consider registering the account as Transfer on death (TOD). See https://www.nolo.com/legal-encyclopedia/avoid-probate-transfer-on-death-accounts-29544.html

[Critter]

It will not be income to you however mom will need to file a gift tax return for the gift if you put the money in your name only.  Leave the money in her account and have check writing privileges on it.  Seek out an elder attorney to answer planning questions since your mom may not be able to gift you that amount due to medicare look back rules.  

[Carl]

Overall, this is a Turbotax support forum. We don't give financial advice here. But for tax purposes, if you put it in an account with only your name on it, the only thing you will pay taxes on, is the interest that money earns. that's it.

I would suggest you open a joint bank account and make sure she is primary. Then you should be secondary with rights of survivorship. Also, you should IMMEDIATELY if not sooner, get with a financial planner THAT YOU TRUST and can hold legally and monetarily liable for the advice they give you on your best options for managing money that is not yours.

Take special note that YOU HAVE NO LEGAL RECOURSE for following any advice you may receive in this public user to user forum - including my advice.