I sent my parents about $60,000 in India. All the money was transferred to my father's account (not joint account). Part of the money ($12000) was used to purchase some property. I am wondering how much should I declare as a gift. Should I declare the entire $60000 as a gift or the 48000 (60k-12k). How much exemption can I take (I would like to split it with my wife)? 13000*2 = 26000 or can I consider my mom as a recipient since my parents live together and consider 2*13000*2=52000. I would appreciate your response.

The full amount of $60K is a gift - it doesn't matter that your father used a portion to purchase property for himself. Since you are allowed a $13000 annual exmption from gift tax reporting you could minimize the tax implications by making the gift jointly to both your parents, and providing the funds from a joint account that you have with your wife. That way you can apply 4 x $13K = $52K of exemption. The remaining $8K must be reported using the gift tax return, although it's unlikely that you would actually owe any tax on this gift.

Thanks for the quick response. Sorry, I forgot to mention. The property was purchased in my name. Also, the funds were sent from my account (not a joint account with my wife). So, I guess I can only claim either 13K or 26K. I don't think I owe any taxes as it is still within the 5 million limit.

So, can anyone please update whether the 12K that was used to purchase property excluded from the gift value reported?