Ask Experts Questions for FREE Help !
    rams4680's Avatar
    rams4680 Posts: 7, Reputation: 1
    New Member

    Oct 27, 2009, 08:39 AM
    NRI taxation

    Me and my wife are both Non resident Indians living in the US and file taxes here. We do not have any income in india other than very nominal interest income on money in Indian bank deposits which is below Indian tax limits. My wife gifted 5 lakh rupees of money, approx $10000 in 2008 to me which I used to pay off a loan for property purchased in india. She had received the 5 lakhs as gift from her parents. Please advise how would it affect from the Indian and US taxation angle. The money transactions were all done from our accounts in india. We have alrealy filed FBAR's.

    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert

    Oct 27, 2009, 10:46 AM
    If you are non-resident aliens (which is dictated by the type of visa you have while in the U.S. a fact you neglected to include in your posting), then the transactions in India have NO BEARING on your non-resident alien tax return (Form 1040NR or 1040NR-EZ).

    On the other hand, if you are in fact resident aliens who must file Form 1040, then you must report the interest earned in the Indian banks on Schedule B which is filed with the Form 1040.

    The transfer/gift of assets between spouses need not be reported to the IRS, as the IRS considers such assets to be jointly owned. Hence, the transfer between the spouses do NOT qualify as gifts for the purpose of the gift tax.

    As for gift from your wife's parents to her, that too need not be reported if her parents are not U.S. citizens or permanent residents.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert

    Oct 27, 2009, 11:01 PM

    You are "Non resident Indians." This does not tell us if you have completed substantial presence test (residency test) in the U.S. or not.
    If you file resident in the U.S. then you should be aware of Form FBAR filing requirements.
    rams4680's Avatar
    rams4680 Posts: 7, Reputation: 1
    New Member

    Oct 28, 2009, 08:02 AM
    Sorry that I was not clear, I'm a US resident on H1B visa.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert

    Oct 29, 2009, 12:29 AM

    Abouts gifts:
    1. A resident can give any amount of gift to the resident spouse.
    2. The receiver of the gift does not pay any tax.
    3. Any resident can give a gift to up to $13,000 to any number of individuals in a year.
    4. If the donor of gift is a non-resident alien, then the donor is not subject to U.S. taxes.

Not your question? Ask your question View similar questions


Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.

Check out some similar questions!

USA taxation for NRA [ 5 Answers ]

Hi I am is usa for coupls of months and my residency status is NRA . I am a indian citizen . There is a tax treaty exists between USA & India . I am based at CT My question is that what will be the Rate of taxation in my case . My gross salary is close to USD 12000 for this two months out...

401 (K) Taxation [ 1 Answers ]

Do I claim gains or losses on a company-sponsored 401(K) savings and investment plan? I did not get 1099 from my employer.

J1 Taxation [ 4 Answers ]

Hello All, I am on a J1 as a trainee, I have read about being exempt? Does hat mean that I will get all of the tax that was withheld back? TIA Cheers Carolyn

Taxation for L1-A? [ 3 Answers ]

Read someplace that L1 visa holders are considered to have been paid a living allowance and can, therefore, claim Federal tax exemption? Is this true? If yes, what tax forms do I submit and how do I claim this exemption? TIA

NJ taxation on a NY LLC [ 3 Answers ]

In 2006 our landscaping business formed an LLC in NY. All of our equipment and supplies are maintained in NY. We only have 2 (individuals) members and both of us are NY residents. We have no employees. We do business in NY, NYC and NJ. We are registered sales tax vendors in NY and NJ. Besides...

View more questions Search