I am a green card holder from Europe. I am retired and spend some 6 months every year in the US. I have no income in the US, I receive a pension from Europe and have rental income from two commercial units inEurope.

My daughter is also a green card holder, she is still in Europe thanks to a re-entry permit which allows her to be away for up to 2 years.

I would like to transfer the two commercial units in Europe (total value some 400.000 USD) to my daughter, but I would keep the rental income (approx. 2000 USD/month).

1) Am I correct in assuming that neither I nor my daughter have to pay gift tax since the value of the gift falls under the unified tax credit?

2) does the gift have to be reported to the IRS and if so, by whom and how? Is there a penalty if gift is not reported?

3) Does the fact that I would keep the rental income play a role? Would this be a socalled „gift of future interests“ and what would be the consequences?

Another scenario would be that I transfer only one commercial unit to my daughter and sell the other one. The profit would be approx. 100.000 USD and it would be tax-free in the country where the property is. Would I nevertheless have to pay capital gain tax in the US and what percentage would it be of the profit?

Thank you for your help.

1) Yes. If you invole the Unified Credit, you will pay NO gift tax.

2) Yes, the gift MUST be reported due to your green card status.

3) Yes, it would.

If you sell the property, the capital gains tax is taxable, probably at 15%.

RUN, do not walk, to a competent tax professional with international and estate tax expertise to discuss these issues face-to-face.