1

My wife and her sisters have a joint bank account and want to transfer their shares of it to their personal accounts. Would such transfers be reported to the IRS?

Improve this question

2 Answers 2

Reset to default
1

I am not an accountant in any way, but I can't imagine needing to report that to the IRS. It's not income and has probably already been taxed when it was earned/received. You're not moving it from an untaxed (Roth) retirement account to a taxed one, or vice versa.

Improve this answer
2
  • I think there might still be issues of gift tax limitations here. If the OP's wife is the only one who puts money into the account, and the value is $100k, then a single sister can't withdraw the full $100k and treat it as hers without triggering gift taxes. The current US amount that would require gift reporting is $14,000 a year I believe, though a $28k gift to a sister could be viewed as a $14k contribution from the OP's wife and another $14k from the OP.
    – davmp
    Commented Aug 31, 2016 at 0:02
  • Correct. I guess I (possibly erroneously) assumed they money was of equal share/contribution to what was being withdrawn by each person. That may very well not be the case.
    – Neal L.
    Commented Aug 31, 2016 at 15:55
-2

Anything over a $10,000 deposit is reported to the IRS. I'm not sure if you need to fill out a form or if the bank does it automatically. As long as it's legit I don't see that there would be any issues. The worst that would happen is somebody would have to talk to the IRS and explain that it was their money and not a gift of some sort.

Edit it is reported to the FinCEN not the IRS

https://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_017.htm

Improve this answer
4
  • Cash transactions of $10k up either direction (deposit or withdrawal) are reported to FinCEN not IRS. And this does not apply to transfers between accounts, which is the question here.
    – dave_thompson_085
    Commented Aug 31, 2016 at 23:20
  • You are right about FinCEN but wrong about transfers. The FinCEN mentions cash transfer numerous times. A bank must electronically file a Currency Transaction Report (CTR) for each transaction in currency (deposit, withdrawal, exchange, or other payment or transfer) of more than $10,000 by, through, or to the bank.
    – kweinert
    Commented Sep 2, 2016 at 10:36
  • Can you cite exactly the line from that document that led you to believe this applies to any $10K+ transactions? I understood as Dave does, this is paper cash only. The classic bag or suitcase of cash.
    – JTP - Apologise to Monica ♦
    Commented Sep 2, 2016 at 10:52
  • @Joe: I've found FinCEN's documents horrible, but his wording matches ffiec.gov/bsa_aml_infobase/pages_manual/OLM_017.htm (the people who enforce this and related regulations) except a footnote (implemented as a tooltip) defining currency as "coin and paper money of the United States or any other country as long as it is customarily accepted as money in the country of issue." +kweinert: So yes transfers from currency are included, along with other currency transactions -- but NOT transfers between accounts, which banks do electronically.without any currency.
    – dave_thompson_085
    Commented Sep 8, 2016 at 5:39

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .