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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15447
Experience:  15years with H & R Block. Divisional leader, Instructor
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Dear Sirs,I am an American citizen and live in Brazil.

Resolved Question:

Dear Sirs, I am an American citizen and live in Brazil. I intend to buy a property in Miami for my son worth usd250,000,00 (who is also Brazilian/American) and give it to my son as a gift this year. Qustions: a) Is it possible? Are there any implications for 250k a year or is there a limit for gift for blood -related siblings? b) Is there a limit in usd which can be donated as a gift? c) I believe he will have to declare this amount in his income tax in 2012, correct? d) Will he have to declare that I (Isabel, his mother) donated it to him or just mention donation? e) Will the US goverment ask him the origin of this resource($$)) or not? Thank you very much. Isabel


Dear Ms,


I have reformulated my questions above. Please consider only the questions below:


a) I want to donate $250,000 to my son for the purchase of his first home. Are there any federal tax implications for gifting 250k in a single year?
b) Is there a lifetime limit/cap (perhaps $1,000,000) which can be gifted to a blood relative (my son)?
c) Will he have to declare this gifted amount in his income tax for 2011? Does he declare it as a gift without having to pay taxes?
d) If he has to declare, what federal tax form would he use?
e) Will the US goverment ask him the origin of this resource($$) or not?
f) In the alternative, I would like to gift a down payment of up to $50,000 to a family friend who would take out a mortgage for the purchase of a property for my son (my son would not qualify on his own for a mortgage). A mortgage consultant said that this would not be permissible, that it would "raise red flags" with the bank giving the mortgage. Is this true? I cannot make a gift to a family friend? And he can't turn around and use it to purchase a home for my son? What are the laws that make this sort of gift impossible? And isn't the gift only nominally to the family friend since he's using it to purchase a home for my son?


Thank you very much,





Submitted: 6 years ago.
Category: Tax
Expert:  Robin D. replied 6 years ago.

Hello and thank you for using Just Answer.

The donor is generally responsible for paying the gift tax. Your son would not be liable for tax on the Gift but you would need to report any gifts over the yearly limit ($13000) to any one individual. You would not need to pay tax on the gift until you reached the lifetime limit of $1mil. Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return is a gift. So even if you followed the procedure in "f" above, you would need to report the gift.

You would need to file Form 709 to report the gift over the limit ($13000) to your son.

If the person making the gift is either a U.S. citizen or resident, however, he or she will be subject to gift tax no matter where the gift is made.

Since you are a US citizen, your son should not be liable for reporting the transfer on Form 3520. Normally, when a US Citizen receives a gift from a nonresident foreign person, they are required to file Form 3520 if the amount is over $100,000.

I sincerely XXXXX XXXXX information is helpful to you,

Customer: replied 6 years ago.

Dear Robin,


If the person making the gift is either a U.S. citizen or resident, however, he or she will be subject to gift tax no matter where the gift is made." Question: But there isn't a gift tax until the $1,000,000 limit is reached, correct? I may have to file form 709 but there won't be a tax to pay, correct?

Another question:
Except for my son living in the US, I don't have any ties to the US, don't do business there, don't own property there, and consequently don't file US tax forms. Will I have to file 1040 or some such form plus the gift form (709) if I make a gift of over $13,000 to my son?



Expert:  Robin D. replied 6 years ago.

Hello again,

As a US citizen you are required to file tax forms regardless of your business connections or property outside the US. As a US citizen you are taxed on worldwide income. There are avenues to receive a tax credit (if you are paying tax in another country) and exclusion of earned income if out of the US for the 330 days in a 12 month period. The reporting of income however does not go away. In fact if a US citizen does not report then they may not use the exclusions and if audited they would be denied the exclusions of earned income based on the tax law that they did not file and request the exclusion in the timely manner for filing. To me US citizens outside the borders of the US this seems ridiculous but it is procedure and tax law.

The reporting of the gift tax on Form 709 is the responsibility of the giver and even if they have not met their lifetime limit for gifts then the requirement is still there. You as the giver and a US citizen are required to file. Gift tax is not owed until the lifetime limit has been met.

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

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