If a relative adds me as a co-owner to their savings account, do I have to declare this for federal income tax purposes?
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5 Comments
No. All they are doing is adding you to the account. The money is still theirs, even though technically by adding you to the account you have as much legal right to the money as they do. Now, if the account is under your social security number, then you would get a 1099-Int at year end, and have to pay taxes on that interest. Otherwise it will have no tax effect on you.
Whose tax ID did you gave to the bank? That’s what the IRS will get as a report.
I wouldn’t worry about it, tony. It’s not like savings accounts are paying big interest or anything. Anyway, the relative should pay any tax.
Nope.
Only one person has to pay taxes on the interest. It usually works out best for the person who makes the least pay taxes. The purpose of being a co-owner is so if the other person dies the money is yours.