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Because your mother is a US person (green card holder) she would be under the US taxation for gift taxes. If she gives you more than $13000, then she (not you) needs to use Form 709 and report the amount that is over $13,000
This is not to say that she will owe tax
Also the account that is in the other country.
If it is her account then she should be reporting either on FBAR (90-22.1 Form) or FATCA (possibly both if the money is substantial).
do you know how this tax well be calculated and how much she will own ? I think amount is around 25000. It's in cash and she has a very small amount on her personal account
She would not owe tax on the gift,
Just report and use her exclusion for lifetime.
So even if she has nothing to report on her Tax Return she still need to file form 709? Should I still file her as a dependent on my tax return for year 2012?
Yes you can claim your mother as your dependent provided she meets all the other items for that. The fact that she had money and gave it to you does not stop her from being your dependent
She needs to file the 709 and the FBAR form because she obviously had nmore than $10,000 in her account over there at some point inth eyear if she can give you $25,000
A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income. The FBAR is not filed with the filer's federal income tax return.
The FBAR is an annual report and must be received by the Department of the Treasury in Detroit, MI, at one of the two addresses below, on or before June 30thof the year following the calendar year being reported.
File by mailing the FBAR to:
United States Department of the TreasuryP.O. Box 32621Detroit, MINNN-NN-NNNN/p>
If an express delivery service is required for a timely filed FBAR, address the parcel to:
IRS Enterprise Computing CenterATTN: CTR Operations Mailroom, 4th Floor985 Michigan AvenueDetroit, MI 48226
Hi, did I lose you in the CHAT
how about proof of that gift money for my mom? her brother didn't left any documented will/note, but some money and my mother sold remaining furniture and other family items in his apartment - this total amount she has in cash and she didn't collect any documents. She has all money in cash as it's a country were people using mostly cash for everything. She has an account in local foreign bank where she has a deposit of 50$ for her retirement from foreign government, but total account balance maybe around 2-3K
i'm trying to give more info
The proof for gift to you could be a simple written statement, nothing special
so if she will write that she sold furniture and other items and giving case money to me - may simple work as a proof?
All she would need to write is This is a gift form her to you. But if she is going to havce a bank account over there (so you can have a bnk therre transfer the funds to your bank) she needs to file the FBAR. Even if she has it for 1 day
havce* sorry have
The gift to you is not a problem, she files the 709 (that is the proof for you getting the money), but not reporting bank accounts overseas are serious problems
I'll check, i think her foreign bank can transfer just a cash to my account here. But if she will have a balance of 10000$ on her bank account there at some point - she will need to file FBAR? I'll check it with her next time we talk.
That is correct.
one more question - for the future - my mom owns a property at foreign country which she became an owner after my dad died. Mom mom is living there when she is in her home country. I think next year we will try to sell it. in this case - will my Mother need to file a capital gain profit prom sale and how estimate a base price of her property?
Yes she will. Her basis is half the original cost and then what ever half of the fair market value was when she got your father's half. SO if the paid $50,000, her half of that is $25,000. When he past it was worth $100,000 (his half of that would be $50,000) her basis when she sells is $75,000 (plus any improvements she mad after he past).
Depending on the last time she used it as her true main homne (not living with you as a dependent). She has to own and live in the house for 2 out of the last 5 years prior to date of sale, she could exclude up to $250,000 of any gain.
this all complicated when property is abroad and hard to determine values , in this case it does not matter if she will 'gift' property to me and I'll sell it - I think in this case I'll have to pay a bigger tax. This all for next year, but good to know
If she gifts it to you, you still have to determine her basis because that would be your basis.
thank you, XXXXX XXXXX I'll need to ask you additional info about same topic - how can I find you?
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one more about gift declaration - any limit for my mom to declare as a gift for this year - as I said I'd estimate it as 25000 plus she may have more as she is going to sell some additional staff and have some cash back. What a lifetime limit?
Right now it is $5mil. She would need to report any amount of gift that is over $13000 in a year. This amount may change depending on what congress does in the coming weeks
i see, for sure our limit much less :-) not millions :-) From a sale of her apartment (maybe next year), she will still need to pay a tax -capital game- and only then she can give me that money as 'gift' - correct ?
SHe can give you the property itself but you will hav ethe same problem with sale (knowing the basis) and she would have to report the gift. She will pay capital gains on the amount over her basis. Correct
Did you need more info before rating
Thank you again and best wishes
I think I good info so far, will see how it will work, thank you, Robin
You are most welcome
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