Q: If a sibling has Power of Attorney over our mother and is the co-signer on her checking account, can the sibling make gifts to other siblings from this account, below the federally allowed 14K that is tax free? Does this money need to be declared in any way by the recipients? Does it make a difference if the mother and the sibling with Power of Attorney reside in Florida and the recipients reside in Georgia, Hawaii, or Arizona? Is this money only federally tax free, or can a state ie: Georgia impose taxes?
A: Yes, gifts under the 14k can be made and do not have to be declared. If she did want to make gifts over this amount they would be filed on her return against her lifetime limit of $5 million. Also, it does not matter which state the recipients live in.