She WILL need to DECLARE the money transfer form, however, on for 3520: Form 3520 - Internal Revenue Service
This is what's called an INFORMATIONAL return ... NO TAX is generated. It is really done for money tracking purposes (money laundering, etc..) ... the transferring of the money itself, is not a taxable event
As you would have paid the capital gains tax to CRA (IF any were due after your deduction) any tax due would have been paid in Canada.
And finally, if you are worried about any gift tax due on your wife's part only the GIVER of the gift pays gift tax in US. And even if it were she that si giving the gift to YOU there would be an annual exclusion of $143,000 in 2013.
See this: http://wills.about.com/od/understandingestatetaxes/qt/giftstospouse.htm
I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here)
Let me know if you need anything else at all on this ...
I don't have to pay any taxes to CRA as the property was our primary residence. In Canada, proceeds from primary residence are not taxable. However, I am not sure if IRS tax my wife on the proceeds of the sale of the house in Canada as she is married to me. If I transfer the funds to US, US knows about the funds. Will IRS tax my wife knowing that I did not pay taxes in Canada on the sale of the property?
thanks, XXXXX XXXXX clarification!
Does my wife have to complete form 3520 now or when she filing her taxes in the beg. 2014 for year 2013?