Change of Account Owner. A change in the Account Owner of an Account is treated as an Outgoing Rollover, not a Non-Qualified Withdrawal, if the new Account Owner is a Sibling of the former Account Owner and an Eligible Individual. However, if the new Account Owner is not an Eligible Individual and a Sibling of the former Account Owner, the change is treated as a Non-Qualified Withdrawal by the former Account Owner. A change in the Account Owner or a transfer to an Account for the new Account Owner may have federal gift tax or Generation-Skipping Transfer (GST) tax consequences. Gift Tax and GST Tax. For federal gift and Generation-Skipping Transfer tax purposes, contributions to an Account by an Account Owner are not considered to be completed gifts because an individual cannot make a transfer of property to himself or herself, and a transfer of property is a fundamental requirement for a completed gift. However, contributions to an Account by persons other than the Account Owner are considered a completed gift from the contributor to the Account Owner and are eligible for the annual gift tax exclusion. Contributions that qualify for the gift tax annual exclusion are generally also excludible for purposes of the federal Generation-Skipping Transfer tax. A donor’s total contributions to an Account for an Account Owner in any given year (together with any other gifts made by the donor to that Account Owner in the year) will not be considered taxable gifts and will generally be excludible for purposes of the Generation- Skipping Transfer tax if the gifts do not in total exceed the annual exclusion for the year.
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