How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lane Your Own Question

Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3647
Experience:  Providing Financial & Tax advice since 1986
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

Hello Randall - My husband is a Japanese citizen and a US

Resolved Question:

Hello Randall -

My husband is a Japanese citizen and a US Permanent Resident ( living over 30 years in the states. I am his wife and a US Citizen. We have a child who is 4. If he wanted to send us fund from Japan, what would the max amount be before we get taxed?

Thank you,
Ilona
Submitted: 8 months ago.
Category: Tax
Expert:  Lane replied 8 months ago.

Lane :

Hi Randall isn't online ... May I help?

Customer:

hello

Customer:

Yes

Customer:

My husband is a Japanese citizen and a US Permanent Resident ( living over 30 years in the states. I am his wife and a US Citizen. We have a child who is 4. If he wanted to send us fund from Japan, what would the max amount be before we get taxed? Thank you, Ilona

Lane :

For US persons, the receipt of gifts or inheritances are never taxed

Customer:

Regardless of the amount?

Lane :

The GIVER of a gift (and the estate of a person who has died) ppays the gift transfers tax

Customer:

What if he alive?

Lane :

Thats correct ... once the amount is ver 14,000 per person per year the GIVER (if a US person) has to file an ninformational return

Lane :

to accumulate the lifetime gifts against the lifetime exclusion of $5,250,000 (for a person dying in 2013) it goes up every year

Customer:

So once its over $14,000 we have to fill out some form.

Lane :

NO ... If HE were a US person, her would have to

Customer:

So during his lifetime he can give us $5,250,000 before being taxed?

Lane :

sorry for the typo ... HE (or his adult guardian) would have top

Lane :

again it is the GIVER, if alive, or the Estate of the decedent (if someone has passed) that pays the tax

Lane :

the eciever (or heor, in the case of death) does not pay the tax

Lane :

again, sorry ... the receiver (or the heir)

Lane :

does not pay

Lane :

Now, there is one more issue

Customer:

In US, but we would have to pay in Japan?

Customer:

So if we inheirt a house and see it in Japan - would we have to pay tax in Japan even if we are US citizen?

Lane :

An informational return (IRS form 3520) must be filed simply to DECLARE the gift received from a foreign person ... If the gift is over $100,000 but this has nothing to do with taxes,,,, this form is used to track money movement

Lane :

That will have to do with whatever Japans taxes are

Customer:

so anything under $100k - we do not have to fill out Form 3520?

Lane :

If you inherit anything at someone else's death, you will receive a step-up in tax basis for purposes of then selling that asset

Lane :

That's correct

Customer:

so it's better to get all the funds before he dies?

Lane :

But on your questions about SELLING a n inherited asset ... THEN as US citizens you mayu be subject to capital gains tax (an INCOME tax)

Customer:

I should say to avoide double tax in japan and here - its bess to receive all the money/funds before his death?

Lane :

for estate/gift tax purposes ... if the amounts will total less than $5,250,000 it is irrelevant BUT for capital gains ......

Lane :

Yes, that would be true

Lane :

Just wanted to make the point that your BASIS in those assets (for purposes of calculating taxable gain when you eventually sell) it's better to receive at death, because of the STEP-UP to date of death values for TAX BASIS purposes

Customer:

So If the house is about 3 million US dollars and he dies and I sell it. Then I would have pay Japanese tax and then pay capital gains in US? am I correct?

Customer:

am I subject to Capital Gains tax if it's more than $5,250,000?

Lane :

No you're confusing capital gains tax (an income tax taid by the person who sells an asset for a gain) and estate/gift tax (a whole different syatem of tax that taxes transfers by gift or by inheritance)

Lane :

If you buy a house for 100,000 and sell it for 200,000 you have a 100,000 gain

Customer:

yes

Lane :

that's an income yax paid by you

Lane :

tax

Lane :

if you are given something or inherit something (the final gift) those axes are paid by the gtiver

Customer:

I see that makes sense.

Lane :

gift and estate taxes (together) are excluded up to 5,250,000

Lane :

capital gains is simplyt sales price minus what you have invested

Lane :

where the two come together is what someone gives or leaves an asset to you8

Lane :

if it's a gift you get the giver's *called carryover) basis

Lane :

if it's l;eft to you at death, your basis in that asset is stepped up to the fair market value as of the date of death

Lane :

and finally, there is no income tax on items received through gift or inheritance

Lane :

just the tax on any profits for selling it later

Customer:

Great. Thats wonderful news.

Customer:

Thank you Lane!

Lane :

and the SIZE of that profit (gain) will depend on whether you get oi through gift or estate - from gift you have the giver's basis - from inheritance, the basis is stepped up to fair market value at date of death

Lane :

You're very welcome!

Customer:

Okay sorry one more thing.

Lane :

Sure!

Customer:

what is more better? The house is paid off. It's about 2.5 million US. If my husband sells it next year he would have to pay tax in Japan and then transfer the money to me (without having to pay any sort of tax)

Customer:

or should we just inherit the house and probably in 50 years it will be more money and pay the tax in japan and then pay the tax here in us?

Customer:

my husband is a bit older then me so i can inherit

Customer:

and still enjoy the money ;-)

Lane :

Other than not knowing what the tax in Japan will be now (OR then) fom the US perspective either way works... if you inherit there is no estate tax (that would be paid in Japan if there is a Japanese estate tax) ... IF he sells now, since you would get the cash after he pays whatever taxes would be owed for the gains on sale there, you will have no taxes here either....so ....

Lane :

it probably depends on (1) how much the value appreciates between now and the date of death (2) the difference in capital gains tax ad estate taxes there .... you won't be taxed here either way ... and from a capital gains perspective the same is true ... he either gets the gains out of the way when he sells OR you inherit and get the asset with the basis stepped up, so that if you sold immediately (before the price went up) there would be no capitl gains tax for YOU that way either

Customer:

Yes in Japan tax is soooooo high for inheritance. more then capital gains tax.

Lane :

soe... IF her were to do fairly quickly... better to sell, pay the gain and transfer to you ....

Lane :

sorry if he were to pass away fairly quickly

Customer:

thats what we are thinking. they just raised it even more last year.

Lane :

FI not things really get complicated by how much the value would go upthere, vs here

Customer:

yes no worries.

Customer:

you are very kind and thanks for the help

Customer:

have a nice evening.

Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3647
Experience: Providing Financial & Tax advice since 1986
Lane and other Tax Specialists are ready to help you
Expert:  Lane replied 8 months ago.

You too!

Let me know if I can help further.

Lane

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.