Are certificate of deposit funds co-owned with my now deceased mother that are distributed to my siblings and myself technically gifts or an inheritance?

by David A. Caplan, CPA | Feb 15, 2019

My mother had a certificate of deposit (CD), and I was also listed on the account. She recently passed away. Can I simply distribute the funds to my siblings and myself as inheritance, or, since I now technically own the account, does it have to be gifted (subject to the $15,000 per person tax limitation)?

Since you were listed on the account, you technically each owned half of the CD. This is known as "tenants in common" as opposed to "joint tenants" (when the two owners are a married couple). As such, when your mother died, it all became yours (not your siblings'). You inherited half of the money—the half that was owned by your mother—and the estate is responsible to pay inheritance tax. If you want to give some of the money to your siblings, you will need to gift it to them subject to the $15,000 limit.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: David A. Caplan, CPA, is a sole practitioner in Lafayette Hill, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Financial FAQs

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.