If a US permanent resident adds a US permanent resident spouse as a joint account-holder on a brokerage (or other) account, what are the gift tax implications, if any?
I believe that in the case of US citizen spouses, there is an unlimited marital deduction for transfers between spouses, but my understanding is that this does not apply for permanent resident spouses. I found this chart, which appears to suggest that 147,000 USD may be transferred annually, and that there's an additional 5,490,000 USD that may be transferred tax-free over an individual's lifetime.
Based on that, my understanding would be that adding a permanent resident joint account-holder would be evaluated as follows:
- half the account value is treated as a gift
- the first 147,000 USD of that half is treated as a tax-free gift
- any remaining value of that half is applied against the 5,490,000 USD lifetime exclusion amount
- any remaining value of that half over the 147,000 + 5,490,000 is treated as a taxable gift.
Is this correct?
As a followup question, for states with that allow for Community Property joint ownership, how does that affect gift/taxation status versus Joint Tenancy?