If your spouse is a U.S. citizen, direct donations generally qualify for an unlimited marriage deduction. For more information on how to file for a gift tax return or gift tax account, see the Gift Rights FAQ on IRS.gov. Spouses with U.S. citizenship can receive lifetime gifts or bequests from their spouse in unlimited amounts based on the unlimited deduction of marriage. Spouses with non-U.S. citizenship who receive lifetime gifts are taxed as if they were not spouses, with the exception of the increased annual exclusion amount for those spouses. In terms of bequests in the event of death, a non-U.S. spouse can enjoy the benefits of citizenship through the use of a qualified domestic trust («QDOT»), where estate tax is deferred until it is actually paid to the non-citizen spouse or the spouse eventually becomes a citizen. Your direct donations to your spouse who is not a U.S. citizen amount to more than $164,000 (for 2022) and $175,000 (for 2023). If you are a U.S.
citizen or U.S. resident, consult an appropriate tax advisor who can explain the planning options that may exist when it comes to donating property. In certain circumstances, non-residents who are not U.S. citizens are also subject to gift tax (and GST) on gifts of intangible property. See sections 2501(a) and 2511(b). Here is the 2021 estate and gift tax table for non-U.S. individuals (green card holders and non-resident aliens). A person is considered a non-resident and not a citizen of the United States if, at the time of the donation, (1) the person was not a citizen of the United States and did not reside in the United States, or (2) was a resident of a possession of the United States and acquired citizenship solely by virtue of his or her birth or residence in possession.
The IRS tax adjustments for the 2021 tax year update the exemptions and exclusions for inheritance and gift tax for non-U.S. individuals (green card holders and ARNs). The chart can be downloaded here: 2021 Estate and Gift Tax Table for Non-U.S. Citizens. U.S. Resident and Non-Resident Alien Inheritance and Gift Tax Saved Gift tax does not apply to the transfer of intangible property by gift by a non-resident who is not a U.S. citizen (whether or not the donor has done business in the United States), unless the donor is an expatriate and certain other rules apply. section 2501 (a) (2); Treaz. Reg. §25.2501-1(a)(3). For a non-resident who is not a U.S.
citizen, gift tax applies to the transfer of certain real property to the United States by gift. You make a gift when you donate certain goods (including money) or the use or income of property without expecting to receive something of at least equal value in return. If you sell something below its full market value, or if you make an interest-free or low-interest loan, you may be making a donation. The IRS will provide a copy of a donation tax return or gift tax return if Form 4506 or Form 4506-T has been duly completed and filed with justification and payment. Upon receipt and verification (including reconciliation of current taxpayer and tax representative records), a copy of the original tax return or statement of account will be sent as requested. Incomplete or unfounded applications will be rejected and a notice will be sent to the applicant. There is a fee of $50.00 per tax return requested. Fees do NE apply for transcript requests. For non-residents who are not U.S. citizens, transfers subject to gift tax include real and tangible personal property located in the United States.
However, gifts of intangible assets in the United States are not subject to gift tax. See IRC § 2501(a)(2). These intangible assets include, for example, shares of U.S. companies. Example. Tom is a non-resident, not a citizen, and he transfers money to an American bank to his daughter, who lives in San Francisco. Money is treated as tangible personal property and is subject to gift tax. While a person is a «resident» for gift tax purposes if that person is «domiciled» in the United States at the time of the transfer, a person is a «deceased resident» for estate tax purposes if the person is a «resident» in the United States at the time of death. Example. Tom is a U.S.
citizen living in Hong Kong. Tom transfers the legal title to his apartment in Hong Kong to his brother. Although the property is located outside the United States, gift tax applies to this transfer because Tom is a citizen. The same result applies if Tom is not a U.S. citizen, but a resident of the United States (Tom lives in California). If you are a non-resident and you are not a U.S. citizen who made a donation subject to U.S. gift tax, you must file a gift tax return (Form 709 U.S. Gift (and Transfer Without Generation) Tax Return if one of the following conditions is met: U.S.
citizens and permanent residents (typically green card holders) are subject to U.S. inheritance and gift tax on their global assets, whether by gift for life or death upon death. Donors who are not U.S. residents and non-U.S. citizens are subject to gift (and generational transfers (GST)) duties on gifts from real property and tangible assets located in the United States. In general, non-resident aliens are subject to gift tax only on transfers of real or tangible personal property located in the United States. Thus, gifts of intangible property by a non-resident foreigner are generally exempt from gift tax. Assets that are not considered intangible property at the time of transfer (and therefore subject to gift tax) include: (i) U.S. real property, (ii) U.S.
tangible personal property, and (iii) U.S. currency or U.S. foreign currency or cash.