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mashanova · Aug 9, 2012, 09:58 AM

My mother inherited property in Russia, sold it and gifted me the money. Does she or I owe any tax on it? And how would I report it to the IRS?

smoothy · Aug 9, 2012, 10:01 AM

Was it gifted to you or did you inherit it after her death... there is an important distinction there between the two...

mashanova · Aug 9, 2012, 10:05 AM

She is still alive. She gifted me the money.

smoothy · Aug 9, 2012, 10:14 AM

Originally Posted by mashanova

she is still alive. she gifted me the money.

Roughly how much money are we talking rounded to the closest thousand?

For you It WILL have to be reported and if it excedes the annual gift limit taxes WILL be owed by you.

Depending on the amount and where she lives... she MIGHT owe taxes... but it does have to be reported.

It might be worth the cost of hiring a financial advisor for this... lots of traps and ways to get into trouble if you don't get someone very well versed on the specifics of the tax law here.

mashanova · Aug 9, 2012, 10:27 AM

Around 200,000 we are in California
What is the annual limit on gift tax?

smoothy · Aug 9, 2012, 10:40 AM

Originally Posted by mashanova

around 200,000 we are in california
What is the annual limit on gift tax?

I forget the exact number... but its way... WAY less than a fraction of that. Something less than $30,000 per year.

You want to hire a tax pro... last thing you want is to underpay, get audited and end up with penalties, fees and interest. The peace of mind will be worth the small cost. No I do not do that for a living.

mashanova · Aug 9, 2012, 10:41 AM

Thanks

AtlantaTaxExpert · Aug 9, 2012, 11:23 AM

Assuming your mother is a U.S. citizen or resident alien, she will need to file a GIFT tax return (Form 706), but she will NOT have to pay any taxes, because she will access the UNIFIED CREDIT to offset any taxes due.

If she needs professional help, she can email me at the email address in my profile (if you cannot see it below).

mashanova · Aug 9, 2012, 11:45 AM

Originally Posted by AtlantaTaxExpert

Assuming your mother is a U.S. citizen or resident alien, she will need to file a GIFT tax return (Form 706), but she will NOT have to pay any taxes, because she will access the UNIFIED CREDIT to offset any taxes due.

If she needs professional help, she can email me at the email address in my profile (if you cannot see it below).

What's UNIFIED CREDIT?

AtlantaTaxExpert · Aug 9, 2012, 12:38 PM

The UNIFIED CREDIT is the credit against the estate tax. Gift taxation and estate taxation are linked in that they share a common credit called the UNIFIED CREDIT. The credit is high enough that the first $5 MILLION of the estate is tax-exempt from the estate/gift tax.