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I am a US citizen and am wanting to send around $22,000 to my fiancée in China. What's the best way to do this? I was thinking of sending $13k per wire transfer to her account and then taking $9k with me when I visit her next month. Are there any tax implications?
Have you ever met her in person? Is this an Internet romance?
Wire transfer of money is a huge red flag for scam.
Yes, we're very close. No need for concern.Quote:
Originally Posted by Wondergirl
Such a transfer represents a GIFT. The first $13,000 is exempt, but the rest will require submission of a gift tax return.
So, would it be better for us to get married first and then wire transfer the money to her in full? What kind of percentage do they take for the GIFT tax?
You would not have to pay a gift tax, as you would access your Unified Credit to avoid the tax.
However, if you can wait until AFTER you get married, that would take of the problem, as there is NO gift tax for gifts between spouses.
Unified credit?
Can I just take the money with me on the plane and give it to her when I get there next month? Then, instead of calling it a GIFT, if asked, I'll just say that I used the money for our wedding and honeymoon? Would that be OK? Would I still need to report anything?
If you GIVE it to her to spend as sge wishes, it is a gift.
If you use the money to pay wedding expenses, then it is not.
Quote:
Originally Posted by AtlantaTaxExpert
Since we are buying an apartment with this money, what about calling it an investment and not a gift? Someone told me that we can write up a contract saying that we're going to mutually enter an investment into real estate and that I'm sending her money to hold and then use to buy an apartment in Shanghai. That it's not a gift and that we'll split the gain/loss up 50/50. Then just pay a capitol gain tax on it later, hopefully, when we sell. We'll be married by then too, which I'm not sure exactly how that'll change things but I'll figure that out later. Would it be OK to do it like that? Thanks in advance for any help.Quote:
Originally Posted by AtlantaTaxExpert
She'll be using the money to help with the down payment of an apartment in Shanghai. We will marry next month, before completion of sale.Quote:
Originally Posted by AtlantaTaxExpert
Such a written agreement is probably prudent, but likely is NOT really needed.
So, I'll be OK by just sending 22k per wire transfer from my US bank to her Chinese bank?
My friend said something about filing a gift tax return for $0. Not sure why
He probably meant that the gift tax return would be filed, but no tax is owed.
If you do what we discussed, NO gift tax return is needed.
So, is everything I've mentioned doing legal? I can just send her $22k? Anything else I need to know? Also, is this the best way to go about doing this?
Sorry I'm asking so many questions. I really appreciate the help. One more question: She will be buying the apartment in her name. How will the potential Capitol gain tax work? Is there any circumstance in which we would be taxed twice on the gain. A tax in China and then in the states?
No, you will be able to claim a tax credit for any taxes paid to China, thus avoiding any double taxation.
And, yes, what you want to do is perfectly legal.
Do you think it'd be best to do this in 3 transfers of $7k?Quote:
Originally Posted by AtlantaTaxExpert
There is no issue in money transfers, some US banks have connections with Chinese banks, for example ABC bank in China is connected with Wells Fargo and there is no transfers fee at all.
Fr Chuck gas it right, as there are no transfer taxes in the United States.
What if I just bring the $22k with me on the plane via travelers check and give it to her after we marry for the down payment? I'll declare it on the flight and say that it will be used for a wedding/ring/honeymoon. Any problems there? Then I wouldn't have to worry about US Capitol gain tax, right?
... as the apartment will be in her name only.Quote:
Originally Posted by Rebbe17
The capital gain will still be an issue, because (I assume) you will filing jointly when and if you sell the apartment.
Would it be better to keep filing single until after we sell the property? Is that even an option? It seems that it will be complicated filing jointly internationally.Quote:
Originally Posted by AtlantaTaxExpert
Once you are married, you can file SINGLE only if you are separated for the last six months of the calendar year.
Otherwise, you will file Married Filing Jointly or Married Filing Separately.
Is there a clear cut, better option between the two ways of filing married? It seems that "married filing separately" would be easier internationally.Quote:
Originally Posted by AtlantaTaxExpert
Married Filing Separately IS clearly the easier way to file, but filing jointly offers many advantages, especially if the wife does NOT work or otherwise have any world-wide income that must be declared.
She will definitely have income from China as she has a good job in Shanghai...
I have no idea how filing married works. I've never been married.Quote:
Originally Posted by Rebbe17
Then I suggest that, when you finally are married and it comes time to file, you seek out a competent tax professional with experience filing for international couples.
Yes, I definitely will. Thank you for all of your help, I really appreciate it.Quote:
Originally Posted by AtlantaTaxExpert
So I guess I'm just going to take the $22k with me in form of travelers check and then give it to her to put in her account after we marry as opposed to calling it a gift or an investment. Then the remainder of the money will be used as a down payment on the purchase of an apartment that will be in her name. Sound good so far?
Yes, it sounds fine!
And I should declare that money at customs, correct? Just say that it'll be used for the wedding and stuff? Then, it'll be exempt from a gift tax?
Sorry, I'm asking so much. Just trying to cover everything.
I am NOT SURE if you need to declare the money at Chinese customs; I THINK so, but I am NOT an expert on such matters.
You might want to check with the USCIS about whether the Chinese require such declarations. and what, if any, taxes are charged.
Ok, I will. I'm pretty sure that I have to declare anything over $10k when leaving or entering the US, but didn't think there was any taxes on it because I'll be using it for a wedding/honeymoon and then won't be giving her any of it until after we marry. She says that there aren't any gift taxes in China yet.
There is a limit on how much CASH you can bring into China, so check with customs on that first. And don't expect China immigration inspection to care why, there is cash, if it is over a certain amount it will either not be allowed in, or a high fee paid.
So not the US customs, you have to worry about, with the Cash, ( they don't actually check you that close going out of the US) it is going into China that you will be subject to a very close check.
Well, I plan on declaring it at both custom checkpoints because it's over $10k, and as long as it doesn't exceed any Chinese limits. Also, I thought the reason for explaining the money was mainly for US tax purposes? Not having to pay the gift tax and such...
So, will USCIS have the answers about customs limitations in China?
If anyone would have the information about Chinese customs rules, it would be their U.S. counterparts, which is USCIS.
You need to file form 709by the date the federal income tax return is due;as long as you gave gifts to someone in 2012 / 2013, I guess, totalling more than $13K ,other than to your spouse, ($14K on or after January 1 , 2013),you must file Form 709.However, you won't have to pay taxes on this gift unless your lifetime giving exceeds $5.12 million as of 2012, or $5.14 mil for 2013 but the IRS requires you to report your giving using Form 709 at the same time you file your 1040. Current regulations require that all cash transfers of more than $3,000 be recorded by the wiring service and that all wires over $10K be reported to the Dept of Treasury by your bank in US.
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