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My fiancée has entered the US with her familys wedding gift

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My fiancée has entered the...
My fiancée has entered the US with her family's wedding gift for us- 20 kgs of gold bars. Do we have to pay income tax on that?
Submitted: 4 years ago.Category: Tax
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12/2/2012
Tax Professional: Barbara, Enrolled Agent replied 4 years ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 4,030
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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bkb1956 :

Thank you for allowing me to be of service to you. You do not have to pay income tax on the gold at this point. You will have to pay capital gains tax when they are sold, and the amount of tax will be computed on whatever profit is realized. You will need to have a good idea or documentation of what the gold was worth when it was received (your basis). The profit will then be the sales price (if and when you sell it) minus your basis to arrive at the amount that will be taxed. Please do not hesitate to contact me if you require further clarification or information. Please remember to rate my answer to you since this is a very important aspect of being an expert on this website.

JACUSTOMER-l6s9ggtc- : Ok! So if we received it when the market was $1750 per oz and sold it when it fell below that, there is no tax owed . Tax is only on the gain made by a higher market at the time of sale. Thank you VERY much!
bkb1956 :

Your are correct. Your basis for any and all sales will be the value of the gold on the date that you received it. You do have to report the sale on Schedule D of your income tax return to show the loss/profit. It has been my pleasure to assist you. Once again, please rate my answer to you.

bkb1956 :

Please remember to rate my answer to you so that I can be paid for same. Thank you.

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Tax Professional: Lev, Tax Advisor replied 4 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
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Hi and welcome to Just Answer!
Different expert here...and there are several issues to cover.
1.
First of all - your basis of assets that you received as a gift is not simply the fair market value (FMV) at the time you received the gift. The basis of gifted asset is the LESSER of the fair market value (FMV) at the time you received the gift and donor's basis.
Basically - you need to determine what the donor paid for the gold - and compare with the FMV at the time you received the gift - and pick the smaller value as your basis.
To avoid confusions - you need to obtain supporting documents of donor's purchase prices.
See for reference IRS publication 551 - www.irs.gov/pub/irs-pdf/p551.pdf - page 8 - Property Received as a Gift.
2.
You will only recognize income and might be liable for gift taxes - if the asset is SOLD.
As long as you keep the gifted asset - no income recognized - and no need to report anything on your tax return.

As a recipient of the gift - the person does not need to claim it as income. Regardless of the value. Please see for reference IRS publication 525 page 34 (left column)- http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. Generally, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you. If property is given to a trust and the income from it is paid, credited, or distributed to you, that income is also taxable to you. If the gift, bequest, or inheritance is the income from the property, that income is taxable to you.

3.

In additional - the large gift from non-resident aliens is reported on the form 3520 - http://www.irs.gov/pub/irs-pdf/f3520.pdf - see part IV.

There is no tax associated with this reporting. Only gifts above $100,000 are reportable.

That is assuming that all donors are nonresident aliens - in case donors are US persons - they are required to file gift tax returns.

4.

There is no duty on gold coins, medals or bullion but these items must be declared to a Customs and Border Protection (CBP) Officer. Please keep a copy of your declaration to support the fact that gold was imported.

See for reference - https://help.cbp.gov/app/answers/detail/a_id/322/kw/gold

 

Please be sure you ask for clarification if needed.

Let me know if you need any help.
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Tax Professional: Barbara, Enrolled Agent replied 4 years ago
First expert here--your basis in the gift depends on whether you sell the gift at a gain or loss. If the fair market value of the gift is less than the donor's adjusted basis, your basis for purposes of figuring gain is the donor's adjustment basis. Your basis for determining loss is the fair market value when received. If the fair market value of the gift is more than or the same as the donor's adjusted basis, your basis becomes the donor's adjusted basis. Thank you.
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Tax Professional: Barbara, Enrolled Agent replied 4 years ago

Just a reminder to rate my service to you since this is an important part of being an expert on this website. If you need additional information or clarification, please let me know. Thank you.

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