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    davidchuncpa's Avatar
    davidchuncpa Posts: 1, Reputation: 1
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    #1

    Mar 30, 2011, 02:29 PM
    A gift tax return filing requirement by a foreign person
    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?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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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.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
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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").
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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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!
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
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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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