This would be a gift
The value of the gift is the Fair Market Value of the father's interest in the property. ... And here in the US only the maker (Giver) of the gift is taxed under the gift tax rules
Your BASIS in the property, should you decide to sell in the future (for capital gains purposes) will be the adjusted basis (original purchase price plus improvements)
To be more specific, your basis is what is always has been and your basis in the gifted portion from your father will be HIS basis (carryover basis) ... so if you bought this property together, then your basis upon any future sale (which WOULD be a taxable event) is simply the purchase price plus any improvements
Still with me?
Looks like you're typing ... I'll wait
are you saying to transfer to property to me from the joint structure, there will be no tax because it was a gift and the giver is a foreign national? That is what I want to know.
Yes, transferring it to you is giving you a gift of his interest (ownership interest) which means that it IS NOT taxable to you ... If He were a US person HE would might have to pat the gift tax, but sine he is not, that is between he and his country of citizenship. Here in the US, neither one of you will have to pay any tax
You are 100% sure on this? That's what I thought. but my accountant told me that it has to do with the type of the property. My accountant says if it was cash then 100% no gift tax but if the property is real property located in the US. It is subject to gift tax.
That is not correct. Yes, I am sure Here's the tax citation you should take to him/her:
he sent me this
can you scroll to page 6
The nature of the gift, whether it be cash, intangibles such as stock, real estate, etc., is not an issue. The VALUE of that gift is an issue
DOes your father come under the expatriate regime?
sorry what about this http://www.irs.gov/Businesses/Gifts-from-Foreign-Person
that is only about trusts right
Only about trusts and gifts from foreign persons COMING in from outside the couontry
THis is not a TAX form, but rather an informational form that IRS forwards to Dept of treasury for the purposes of tracking money movements (money laundering, etc)
There will be no tax here UNLESS your father falls under the expatriate regime, where he has renounced his US citizenship
ok sounds good