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A gift tax return filing requirement by a foreign person

Asked Mar 30, 2011, 02:29 PM — 4 Answers
I am a U.S. Citizen.
My brother in korea wants to give a property in the U.S. To me as a gift.
In this case is he required to file a gift tax return and pay gift tax?
Is he also entitled for the gift tax credit even if he is a foreign person?

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ebaines's Avatar
ebaines Posts: 10,047, Reputation: 5534
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#2

Mar 31, 2011, 06:56 AM
Only US citizens need file a gift tax form. So assuming your brother is not a US citizen, then no - he does not need to file or pay gift taxes, even though the property is located in the US. See "who must file" for form 709 (the Gift Tax Form) here: Instructions for Form 709 (2010)

And since the gift tax credit goes against estate taxes, that doesn't apply here either.
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IntlTax's Avatar
IntlTax Posts: 812, Reputation: 118
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#3

Mar 31, 2011, 11:25 AM


Yes, he has to file and pay tax if the gift exceeds $13,000. See page 3 of instructions to Form 709 (titled "Nonresident Aliens").
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ebaines's Avatar
ebaines Posts: 10,047, Reputation: 5534
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#4

Mar 31, 2011, 03:03 PM
I stand corrected - thanks IntlTax. I'm afraid I was fooled by page 1 of the instructions which mentions only US citizens and residents under "who must file." But indeed on page 3 it specifically addresses nonresident aliens who give tangible property located in the US. And as I read the instructions further, it appears that non-resident aliens are NOT entitled to the lifetime gift tax exclusion, so gift taxes will indeed be due if the property is valued at more than the annual exclusion of $13K. Ouch!
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IntlTax Posts: 812, Reputation: 118
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#5

Mar 31, 2011, 04:54 PM


Nonresident aliens are not qualified for the lifetime exclusion. I believe that resident aliens do qualify.
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