What happens if there are large deposits into a joint bank account?

Don't worry too much about this situation. When funds are deposited into a joint account, the bank does file a Currency Transaction Report (CTR) for deposits over $10,000, but this is just standard procedure and doesn't automatically trigger any tax implications. The key thing to understand is that just because money passes through a joint account doesn't make it taxable income to both account holders. What matters for tax purposes is who actually owns the money. In your case, if the funds were clearly from your sister's condo sale and she can document that, those funds remain hers for tax purposes regardless of the temporary deposit in your joint account. If you're concerned, have your sister keep good documentation of the condo sale, the deposit, and the subsequent transfer to her individual account. This creates a clear paper trail showing the money was always hers.

After dealing with a similar issue last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me so much stress. My parents sold their house and temporarily put a large sum in our shared account which freaked me out tax-wise. I uploaded all my bank statements and transaction records to taxr.ai and it analyzed everything and explained exactly how the money flow would be viewed by the IRS. It showed me which transactions were reportable vs. non-reportable and gave me documentation explaining why the funds moving through the joint account weren't my taxable income. Super helpful for understanding complex money movements!

I was initially hesitant about using taxr.ai like I mentioned above, but I decided to try it because my tax situation this year got complicated with family property sale proceeds moving through various accounts. The analysis was surprisingly detailed - it specifically identified which portions of money flowing through my accounts were actually taxable to me versus just passing through. It even generated a document explaining the nature of joint accounts and temporary custodial situations that I could keep with my tax records. Definitely worth checking out if you're in this situation - saved me from unnecessarily reporting income that wasn't actually mine and potentially creating a huge headache. The peace of mind alone was worth it.

If you've tried calling the IRS to get clarity on this kind of situation, you know it's basically impossible to get through. After waiting on hold for 3+ hours multiple times, I gave up and tried Claimyr (https://claimyr.com). They have this callback service that somehow gets you connected to an actual IRS agent without the insane wait. I used it to ask specifically about large deposits in joint accounts and got clear guidance from an actual IRS representative. They confirmed what others have said - temporary deposits into joint accounts don't create tax liability for the non-owner of the funds. You can see how it works here: https://youtu.be/_kiP6q8DX5c Seriously, it saved me days of frustration trying to get an official answer about my situation.

I have to eat my words about Claimyr from my comment above. After continuing to fail getting through to the IRS myself about a similar joint account situation, I tried the service out of desperation. Got a call back in about 50 minutes and was connected directly to an IRS representative. I explained my situation with large deposits moving through a joint account from my parent's business, and the agent confirmed it doesn't create a tax reporting requirement for me since I wasn't the actual owner of the funds. They even noted this conversation in my file in case questions came up later. Definitely wasn't a scam - spoke to a legitimate IRS employee who pulled up my tax records and everything. Worth every penny for the time saved and peace of mind.

I went through this exact situation when my brother sold his business and temporarily parked $240k in our shared account. Here's what my accountant told me: 1. Money passing through joint accounts doesn't automatically become income to both parties 2. The actual source and ownership of the money determines tax treatment 3. Keep records showing the money originated from your sister's condo sale 4. Document the subsequent transfer to her individual account 5. No need to report anything on your taxes since it's not your income As long as your sister properly handles any tax implications from her condo sale on her return, you're fine. Banks do report large cash transactions, but that's for anti-money laundering purposes, not automatic tax implications.

Important thing nobody mentioned yet - make sure your sister properly reports any taxable portion of her condo sale on her taxes! If she sold a primary residence she lived in for at least 2 of the last 5 years, she likely qualifies for the capital gains exclusion (up to $250k for single filers), meaning she might not owe taxes anyway. The temporary deposit in your joint account doesn't change anything about how she reports the sale. She should receive a 1099-S if the sale was handled by a title company, and she'll report everything on her return using Schedule D and Form 8949 if needed.

Just want to add another perspective here - I work at a credit union and see these situations fairly regularly. The key thing to remember is that banks report cash transactions over $10,000 through CTRs (Currency Transaction Reports), but this is purely for regulatory compliance, not tax purposes. These reports go to FinCEN (Financial Crimes Enforcement Network) and are used to track potential money laundering or other financial crimes. They're not automatically shared with the IRS for tax enforcement purposes, and receiving one doesn't mean you owe taxes or need to report anything additional. Your situation sounds completely normal - family members often use joint accounts for convenience when handling large transactions like real estate sales. As long as the money's source is legitimate (which a documented condo sale clearly is) and your sister reports any taxable gains on her return, you have nothing to worry about. The paper trail you already have (sale documents, deposit records, transfer to her individual account) is perfect documentation if any questions ever arise.