As mentioned earlier, some joint gifts will not be deemed completed at the time of transfer because the donor is still deemed to have some control over the disposition of the property. Specifically, joint bank accounts will not be deemed completed until the funds are withdrawn from the account by the donee. This is because the donor may still withdraw funds, thus changing the disposition of the property. Jointly held U.S. savings bonds fall within this category as well and will not be a completed gift until the bonds are surrendered and the donee has received the cash. Similarly, a check to a donee will be considered completed when the donee presents the check for payment to the bank.
Some transfers are subject to a recapture rule even though the gift is completed.
This rule will pull the value of the gift, including any growth, back into the estate if death occurs within three years of the transfer. These transfers include property of life insurance as well as property that had certain retained interests. After it is determined that a gift has taken place, we must ask whether there is an exemption available that places it outside the scope of taxation. This is called gift splitting and all gifts for that tax year will be deemed gifted one-half by each spouse. A present interest gift means that the donee must have full control over the property at the time of transfer.