Tammy wrote:

- quote -

Another way of looking at this transaction is that you have
created a trust (you can have an oral trust if there is no
written trust instrument), with your sister as the trustee
and you as the beneficiary. If you have the right to
determine when the money will be paid back to you, you have
retained a right to revoke the trust, which makes it a
grantor trust under the income tax rules. All of the income
from the assets would be subject to tax on your tax return
(not your sister's), and for creditor purposes the assets
would be considered your assets, and not your sister's.

--Chris

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"Tammy" <tammy_gutter[at]yahoo.com> wrote:

- quote -

Why are you doing this?

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- quote -

In the world of taxes, it's not what you say but what you
do. You don't define how long your "certain period of time"
is, so that is important. If the time period is in years,
then you will have to accrue interest since it will be
considered a loan. If it's in decades, as in "Here's $100K
give it back to me in 30 years" then the IRS will most
likely call it a gift. Also, the purpose of shifting this
asset out of your name comes into play. Why are you letting
your sister hold on to $100K of your money for a while? Once
it's out of your name and in your sister's name, what if she
decides not to give it back, or what if she dies?

--
Robert J. Romano, CPA
99 Massachusetts Avenue-Suite 4
Arlington, Massachusetts 02474-8600
www.romanocpa.com

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tammy_gutter[at]yahoo.com (Tammy) wrote:

- quote -

Since there are several nefarious reasons for wanting to do
this, and no legitimate one that I can see, it makes me
wonder just what you are trying to accomplish by such a
transaction. It looks like you are planning to conceal
assets (on your part) or make a false show of assets (on her
part).

- quote -

Transferring property (such as money) to someone else, for
something less than its fair market value, stands a chance
of being considered a gift. When it is between relatives, it
stands a chance of being looked at closely to determine
whether it is a gift. When it is between relatives, and
nobody can point to an arm's-length business deal or even an
agreement to repay, it looks just as much like a gift as a
duck looks like a duck.

If you give money to your sister, without an agreement to
repay you, you have most likely made a gift. If there is an
agreement to repay, you have most likely made a loan.

If you make a loan at no interest, you may still have made a
taxable gift: the IRS imputes interest on the loan, and this
imputed interest is treated as interest income to you and a
gift of that income from you to her.

Everybody starts out with a substantial unified tax credit,
which covers both gift and estate tax. Taxable gifts
exceeding your annual deduction (you can give up to $11,000
per person to anybody, and spouses can make gifts of any
amount to each other) use up some of your unified tax
credit. Only when this is exhausted do you pay current gift
tax or estate tax.

Putting the money in a joint account may or may not do what
you want. Joint accounts are owned in proportion to the
contributions of each owner: if you put in all the money, it
is still all yours, and none of it is your sister's. If your
sister withdraws any of it, it is a gift from you to her.
Note that if your sister has creditors, they may be able to
satisfy their debts out of the account.

--
Chris Green

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Tammy wrote:

- quote -

If you want to receive intelligent answers, you will have to
explain exactly WHY you are doing this, and WHAT YOU EXPECT
to accomplish. If you are trying to conceal money from a
spouse or other creditors, may I politely suggest that this
is not the proper forum to discuss such matters.

MTW

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Tammy wrote:

- quote -

It's not a gift so no gift tax should be incurred. Be sure
you document the transaction and what it is for, just in
case someone questions it, though.

- quote -

They look to see if there was an actual gift, something of
value given for less than full consideration. If not, it's
not a gift.

Stu

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If I put money (> $100K) in an account in my sister's name to
keep for a while(nothing to do with taxes), will I have to
pay gift tax? This is NOT a gift and she is only keeping it
for me for a certain period of time. Afterwards, I will
take the money back and either spend or put into an account
of my own.

What criteria does IRS use for determining when a gift tax
should be paid? If this IS considered a gift by IRS, I
assume I can avoid it by either adding my name to her
account (in which case, only I will withdrawn the money when
needed) or remove the money from her account and put in an
account of my own?

Please advise. Thanks.

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