- quote -

Creating a power of attorney does not deprive one of control
over his property, but merely gives another power in as
well. The property is under her husband's control - he just
chooses not to exercise it under the circumstances.

- quote -

She also said the account was set up before they were
married. If it had been set up after marriage and in a
community property state, they could give $22,000 without
having to file a gift tax return, since the gift does not
need to be split.

Stu

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- quote -

The $11,000 figure is correct. The OP said that the account
is in the name of her husband so if the value is greater
than $11,000 they would have to file a gift tax return to
elect to split the gift.

Gary

--
You can probably X figure out X which letters to X delete to
derive my email address X.

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- quote -

$22,000

- quote -

As mentioned, that would cause a family crisis (upsetting the
grandfather) which OP wants to avoid doing.

Seth

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- quote -

Yes

- quote -

Only by "gifting" it and that could mean more tax problems
for you.

- quote -

To give an answer to this, we would have to know just how
much money you're talking about, how much it's costing you
in taxes, and other info. Why do you have to do anything?
If it makes Grandfather happy, doesn't cost you that much,
why not just continue as you are now doing. If, after all,
it was Grandfather's money to begin with, on his death you
will "inherit" all of it anyway.

Why rock the boat?

Kate Botella, EA in PA

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- quote -

If you give the account to grandfather, then no one gets the
capital loss you say exists on paper.

If your husband owns the account and stocks are sold at a
loss, he gets the loss, and if too large to claim that year,
he can carry over the loss indefinitely. If he gives the
acocunt including paper losses to grandfather, no one gets
the loss even if the stocks are later sold.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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sarahd00d[at]yahoo.co.uk (sarah chang) writes:

- quote -

Yes. It's your husband's money, no matter how the account
is administered.

- quote -

Depending on the amount involved, it could also trigger gift
tax requirements.

- quote -

An easy one. There's only one thing in this mix you can
control: your attitude. Either get over not having control
of everything on your return or file married filing
separately.

Phil Marti
Topeka, KS

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- quote -

Here you describe an account that is owned by your husband
(listed under his SSN), but he does not control it because
of the POA that he granted his grandfather.

- quote -

To do this, you would have to "give" the account to your
grandfather. If the account has a value of more than $11,000
then you would have to file a gift-tax return for the account
and you may possibly incur some tax liability on the gift,
depending on the amounts. After that, the account would belong
to the grandfather and you would have no legal right to it or
it's income.

Why not have your husband just rescind the POA that he signed.
Then your husband or you can manage the account however your
like, or select a company such as Fidelity Investments (they
are one of many) to do this?

-- To reply to me directly, remove the XXX characters from
my email address.

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My husband's elderly grandfather has a share-trading account in my
husband's name (my husband signed over a power-of-attorney on the
account to his grandfather long before we met or married).

I guess the money in the account theoretically belongs to my husband;
however we are quite happy to let Grandfather continue to play with it
(I think that the original contributions to the account all came from
Grandfather, although we're both not too sure about this).

The only problem we have with this situation is that the account goes
on my husband's (and hence our -- since we file together) tax returns.
I feel very strongly that anything in our tax return should be under
my or my husband's direct control.

We are looking for the easiest, most pain-free way to resolve the
situation. The ideal situation, from my husband's and my points of
view, is to transfer the account so that Grandfather, rather than we,
has tax liability for the account.

We keep reminding Grandfather to close the account, so that he can
open a new account in his own name. We are quite happy to let him
keep the money.

Unfortunately Grandfather is most reluctant to close the account. We
think that he gets a lot of pleasure out of playing the stock market.
He also seems to get a warm fuzzy altruistic feeling out of the
thought that he is doing all this for _us_, not for his own benefit:
he occasionally gives us money from the account as a gift.
Furthermore, his stocks are now trading well below their peaks from
the dotcom era, and he cannot seem to be able to admit that he made a
mistake by holding onto them (as he would have to do by liquidating
the account).

We have the following questions:

1. Given the situation as described above, are we legally obliged to
include the profit or loss from the account on our tax returns?

2. If the answer to the previous question is "yes", is there an easy
way to transfer the tax responsibility to Grandfather (ideally with
minimum participation from Grandfather)?

Obviously one way to deal with the situation would be to revoke the
power of attorney, close the account and give the money to
Grandfather. However this would likely cause a severe family crisis,
and we would like to avoid it if at all possible.

3. Is there a way to resolve the situation without causing a severe
family crisis?

Thanks to all of you in advance,

S

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