Re your fact set: The only gift tax exclusion available to an NRA
is the annual $16000 limit per donee. Other than that, gifts of
real and tangible personal property are subject to US Gift Tax.
See the following IRS FAQs on this subject. Any gift tax paid does
add to the cost basis of the property.
t.ly/1y1g
I'm confused about something. I know that non-citizens don't get a
lifetime exemption (of a bit over $12 million for 2022) with respect to estate tax.
But as far as I can tell that exclusion doesn't apply to gift tax. I
have a client who is going to receive a gift of real property located
in the US, from a parent who is neither a US citizen nor resident.
The only reference to non-citizens I could find is in section 2501,
where it says that, under some circumstances, the tax doesn't apply to non-citizens. But I couldn't find anything talking about the lifetime exemption.
What's the story?
Thanks for any insight you can give.
Tempuser <tempuser@vacationmail.com> wrote:
Re your fact set: The only gift tax exclusion available to an NRA
is the annual $16000 limit per donee. Other than that, gifts of
real and tangible personal property are subject to US Gift Tax.
See the following IRS FAQs on this subject. Any gift tax paid
does add to the cost basis of the property.
t.ly/1y1g
Thanks. That's what I thought. But I couldn't find it in the
code, so I was confused.
On Sun, 3 Apr 2022 20:26:54 EDT, TempuserNothing happens. For US income taxes the money is treated just like
<tempuser@vacationmail.com> wrote:
Re your fact set: The only gift tax exclusion available to an NRA is the
annual $16000 limit per donee. Other than that, gifts of real and
tangible personal property are subject to US Gift Tax. See the
following IRS FAQs on this subject. Any gift tax paid does add to the
cost basis of the property.
Alan (or Tempuser, if you prefer),
My client is inheriting money from a UK estate. Estate is unlikely
to pay U.S. tax on funds. What happens here?
Re your fact set: The only gift tax exclusion available to an NRA is the >annual $16000 limit per donee. Other than that, gifts of real and
tangible personal property are subject to US Gift Tax. See the
following IRS FAQs on this subject. Any gift tax paid does add to the
cost basis of the property.
bc wrote:
Tempuser <tempuser@vacationmail.com> wrote:
Re your fact set: The only gift tax exclusion available to an
NRA is the annual $16000 limit per donee. Other than that,
gifts of real and tangible personal property are subject to US
Gift Tax. See the following IRS FAQs on this subject. Any gift
tax paid does add to the cost basis of the property.
My client is inheriting money from a UK estate. Estate is
unlikely to pay U.S. tax on funds. What happens here?
Nothing happens. For US income taxes the money is treated just
like inherited money is treated from a US estate. If the client
resides in a US state that taxes inheritances, then you must look
to that state's law.
There may be a reporting requirement. IRS Form 3520 has to be
filed with the IRS when one receives gifts or bequests valued at
more than $100,000 from a nonresident alien individual or foreign
estate.
He actually said he inherited money.
My client is inheriting money from a UK estate. Estate is
unlikely to pay U.S. tax on funds. What happens here?
Nothing happens. For US income taxes the money is treated just
like inherited money is treated from a US estate. If the client
resides in a US state that taxes inheritances, then you must look
to that state's law.
There may be a reporting requirement. IRS Form 3520 has to beThere is one possible thing. He said there is an inheritance from a
filed with the IRS when one receives gifts or bequests valued at
more than $100,000 from a nonresident alien individual or foreign
estate.
UK estate. But he doesn't specify that the property being inherited
is located in the UK. If any of that is located in the US, then gift
or estate tax will apply to that portion of the inheritance.
--
Stu
http://DownToEarthLawyer.com
--
Stuart O. Bronstein wrote:
He actually said he inherited money.There is one possible thing. He said there is an inheritance fromMy client is inheriting money from a UK estate. Estate is
unlikely to pay U.S. tax on funds. What happens here?
Nothing happens. For US income taxes the money is treated just
like inherited money is treated from a US estate. If the client
resides in a US state that taxes inheritances, then you must
look to that state's law.
There may be a reporting requirement. IRS Form 3520 has to be
filed with the IRS when one receives gifts or bequests valued
at more than $100,000 from a nonresident alien individual or
foreign estate.
a UK estate. But he doesn't specify that the property being
inherited is located in the UK. If any of that is located in the
US, then gift or estate tax will apply to that portion of the
inheritance.
--
Alan <tempuser@vacationmail.com> wrote:
Stuart O. Bronstein wrote:
He actually said he inherited money.There is one possible thing. He said there is an inheritance fromMy client is inheriting money from a UK estate. Estate is
unlikely to pay U.S. tax on funds. What happens here?
Nothing happens. For US income taxes the money is treated just
like inherited money is treated from a US estate. If the client
resides in a US state that taxes inheritances, then you must
look to that state's law.
There may be a reporting requirement. IRS Form 3520 has to be
filed with the IRS when one receives gifts or bequests valued
at more than $100,000 from a nonresident alien individual or
foreign estate.
a UK estate. But he doesn't specify that the property being
inherited is located in the UK. If any of that is located in the
US, then gift or estate tax will apply to that portion of the
inheritance.
--
Is money considered intangible property for this purpose?
Is money considered intangible property for this purpose?Not sure why you are asking this unless you are wondering what if
the foreign estate owned financial accounts in the U.S. The
beneficiary still gets the funds without any tax implications, but
the foreign estate may be subject to US estate tax.
Not sure why you are asking this unless you are wondering what if the
foreign estate owned financial accounts in the U.S. The beneficiary
still gets the funds without any tax implications, but the foreign
estate may be subject to US estate tax.
According to Tempuser <tempuser@vacationmail.com>:
Not sure why you are asking this unless you are wondering what if
the foreign estate owned financial accounts in the U.S. The
beneficiary still gets the funds without any tax implications, but
the foreign estate may be subject to US estate tax.
If it's a foreign estate with no US contacts other than the
beneficiary, how would they collect the estate tax? The IRS sends
the foreign estate a bill, the estate throws it away. Then what?
Tempuser <tempuser@vacationmail.com> wrote:
Is money considered intangible property for this purpose?Not sure why you are asking this unless you are wondering what if
the foreign estate owned financial accounts in the U.S. The
beneficiary still gets the funds without any tax implications, but
the foreign estate may be subject to US estate tax.
That was my point. If cash is located in the US, it could be subject
to gift/estate tax even if the donor was a non-citizen/non-resident who
was not in the US at the time of the gift. If gift tax is due but the
donor doesn't pay it, they can go after the donee.
I asked about intangible property because stock in a foreign
corporation is considered intangible property. Even if it owns
property in the US, if that stock is gifted by someone who is not a
citizen or resident of the US, there will be no US gift or estate tax
on it.
On 4/9/22 3:39 PM, bc wrote:
My client is inheriting money from a UK estate. Estate is unlikely
to pay U.S. tax on funds. What happens here?
Nothing happens.
Tempuser <tempuser@vacationmail.com> wrote:unlikely
bc wrote:
My client is inheriting money from a UK estate. Estate is
to pay U.S. tax on funds. What happens here?
Nothing happens.
Thank you.
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