In: Accounting
Is there a completed gift in the following example? Explain.
(a) Dan Donor paid $32,000 for a new car and gave the car (transferred title and keys) to his 17 year old daughter
b) The mother established a joint account for herself and Arlene, her daughter. Under the account, either can withdraw the funds.
In my context there is no completed gift in given examples.
1) The term "gift" is defined under section 122 of the transfer of property act 1882.The main requirements of transfer of a movable or immovable goods by way of deed are as follows:-
•There shall be certain existing property either movable or immovable.
•The gift shall be made voluntarily.
• The gift shall be made without consideration.
•The gift shall be accepted by the person to whom the goods are gifted.
2) In case of joint account and brokerage accounts however,a transfer of assets into bank is generally not a completed gift.with respect to transfer involving joint held property,the donee's basis depend in part on whether the donor retains an interest in the property.
In the given example the creation of the account does not constitute a completed gift from mother to her daughter because mother could at any time revest title to the assets in herself.