<prompt> Human: Hi guys, slightly complicated situation here.My wifes father has had a joint account in both his and her names into which he has been putting money for years to pay for her college. When it came time for her to go to college however, he thought it would be better to just let that money sit and accrue interest and pay for it out of his other account. Now that shes graduated, he wants to move that money earmarked for college back to his main account, but the bank will only let her take the money out. So, their solution to this was to have the bank send her a check for the full amount, and then once she deposits it, she will send him a check for that amount, which is nearly 60K.What Im worried about is gift taxes - once the money is deposited in her account, even if its been sitting in a joint account with both their names for so long, it counts as hers, right? I feel like were walking into something that could cause some major headaches with the IRS, especially with this much money being transferred at once.Do we have to pay gift tax on this? How do we declare it if we do?Thanks for any help  <response>: Lots of answers here, all over the place! A few things:1. The estate tax and gift tax are now connected to one unified exemption amount of about 5.25 million in 2013, and increased for inflation each year. That means a person can give up to that amount - in life and at death - in total before estate or gift taxes kick in. 2. A person can give up to 14k each year without any reporting, because yearly gifts at or below that amount do not reduce your unified credit amount. The 14k is an annual exclusion. For yearly gifts in excess of that amount, form 709 must be filed to report the gift so IRS can keep track of how much of your lifetime exemption is used up. 3. Again, no gift taxes are due until a person has given away more than 5 million in their lifetime, above the annual 14k exclusion amount.4. If you wifes dad was making deposits into a joint account, there may have been completed gifts to her with each deposit of at least 50 of the deposited amount, because she was a joint holder of the account. This is a question of state property law and also federal tax law. In other words, if he put in 5k a year, those were a series of 2500 gifts with no reporting needed because less than then the 14k annual exclusion, and a final large gift of his half which would require filing form 709 in the year she gets it all. 5. This says nothing about state gift tax, which may or may not apply depending where you live.6. Tldr get records of his deposits, and put up a couple hundred bucks for an accountant to properly report the gift. Unless her dad has given away millions, no tax will be owed. Just paperwork. Bonus: you can give unlimited money to your spouse or a charity. Have fun!ninja edit: the annual gift exemption was lower in the past e.g. 10k in 1997. double edit: reading your post again, it seems like this may have been a UTMA uniform transfers to minors act account, which is common for college savings. Deposits by a parent into a UTMA are complete transfers when they are made. In other words, if she is giving the money back, she is the donor and should report the gift to IRS. Again, unless you have given away millions, it is just paperwork. 