Hello,

I live in the U.S. with my wife as non-resident aliens (I'm on an H1B an she's on an H4 visa) and we are married filing jointly. My mother who is foreign and lives abroad want's to give us a loan of 20k so my wife can use them to pay for her studies.

Should we receive it as a college found, loan or gift? We will spend it in the next 2 years and we also plan to give her the money back eventually.

Thanks!

I live in the U.S. with my wife as non-resident aliens (I'm on an H1B an she's on an H4 visa) and we are married filing jointly. >UNLESS you are a US resident(s) for tax purposes , you can not file your US return jointly; Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. However, nonresident aliens married to U.S. citizens or residents can choose to be treated as U.S. residents and file joint returns.

My mother who is foreign and lives abroad want's to give us a loan of 20k so my wife can use them to pay for her studies.

Should we receive it as a college found, loan or gift?=>>you may receive any of them however you do not need to report the amount on your US return . For example; say you receive the money as a gift from your mother, you don?t need to report it as income on your US return sicne you are a donee.

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I want to understand tax implication for this scenario. Let's say there is 1 million cash payout on a jackpot. If a person buys the ticket for dollar and donate it to charity in the donation box before the drawing is made, and that ticket wins jackpot, my understanding is that the person donating the ticket will not get taxed on payout because what the person donated is only a dollar.===>Correct; you are NOT liable for income tax on the transferred ticket before it became a winner.

The charity is tax exempt and it received a donation of value 1 dollar which later became 1 million, and I believe they will not be taxed. So charity should get the whole 1 million jackpot without paying any tax.=======> In general, a contribution?s value is based on the: type of asset donated, and date of contribution, which ordinarily is the date when the asset is unconditionally removed from the donor?s control.


Am I correct? Because I would like to donate the ticket before the drawing and if they are lucky, they would get whole amount. If I get the jackpot, even if I'm ready to give it all, I will end up paying tax for 50% of the jackpot.=========>> Section 501 of the Internal Revenue Service (IRS) tax code exempts qualified nonprofit organizations from federal taxes. A nonprofit organization is an organization that engages in activities for both public and private interest without pursuing the goal of commercial or monetary profit; Thus, you as a winner giving all the money to charity might still pay tax on half. Declining a win and turning down the money, done properly, may avoid the income entirely and be treated differently than making a gift after you win. But clearly this requires professional help. Of course, most lottery winners aren?t trying to give all the money to charity. Many face deals with family, friends and co-workers. And there again, winners clearly need tax advice. The tax messes that are triggered can be huge.
the Tax Court considered aWaffle House waitress who won a $10 M lottery jackpot on a ticket given to her by a customer. The Tax Court held she was liable for gift tax when she transferred the winning ticket to a family S corp (formed for this purpose) of which she owned 49 %. It was truly a mess with extra tax dollars generated because the tax plan was a best half baked