CD to IRA
My mother has a large certificate of deposit at our local bank that she intends for me to inherit. Is it best, for tax purposes, or otherwise, for me to be listed as a joint owner with her on that CD or as a beneficiary? Also, is there any way to roll that inheritance into an IRA?
Permalink Submitted by Alan Spross on Wed, 2008-04-30 00:33
No, it cannot be rolled into an IRA.
For a joint owned non IRA CD, the income tax is due from the JT who receives the interest, which in this case is typically the parent whose SSN appears on the account. The 1099 INT is also issued to the parent. This is the same tax treatment that would occur if you were only named as a POD beneficiary of the CD.
Other than tax issues, if you are named as a JT on the CD, any liability you incur can result in attachment of half the CD. Gift tax liability would be incurred by your mother only if you withdrew funds from the account while she remains living.
Since your mother supplied the funds, the entire account will be in her gross estate despite your being listed as a JT on the account.