Foreign Gift (India to US)

indus · #1 (**permalink**) 10-12-2013, 12:59 PM

I am an U.S. citizen planning to purchase an apartment in the U.S. for approximately $250-350k in the next 6-months to 1-year. My grandparents who reside in India as Indian citizens have agreed to provide me with 20% ($50-70k) of the cost as a down payment to secure a mortgage.

Basically, I would like to understand the tax implications of this transactions from my perspective as well as my grandparents. I want to limit the tax liability for both parties in India as well as the US. Who will be taxed and approximately how much? Are there ways to minimize the tax liability? I know there is a $13k maximum tax-free gift in the U.S. per donor to recipient. As an example, would we be able to minimize the overall tax liability for all parties if my grandma/grandpa send me $20k, my aunt/uncle send me $20k, and my cousin/spouse sends me $20k (Basically $10k/person)?

I obviously plan to consult a tax advisor when the time approaches, but wanted to research the subject on my own beforehand. Thanks in advance and I look forward to hearing from you soon.

[TAGS] India, International, US, Gift, Tax, Real Estate, Donor, Recipient

Wnhough · #2 (**permalink**) 10-13-2013, 03:13 AM

Quote:

Originally Posted by indus

#1;Basically, I would like to understand the tax implications of this transactions from my perspective as well as my grandparents. I want to limit the tax liability for both parties in India as well as the US. Who will be taxed and approximately how much?

#2;Are there ways to minimize the tax liability? I know there is a $13k maximum tax-free gift in the U.S. per donor to recipient. As an example, would we be able to minimize the overall tax liability for all parties if my grandma/grandpa send me $20k, my aunt/uncle send me $20k, and my cousin/spouse sends me $20k (Basically $10k/person)?

#1;As long as you receive $50K~$70K from your GPs in India, your GPs in India, as they are Non-US residents, don’t need to pay any US tax on their gifts(perhaps your GPs in India may need to pay some tax(es) to Indian taxing authority(ies) on their gifts for you. They need to check it with Indian taxing authorities).You also , as a donee, do not need to pay any tax on the gift from India. In general,in the US, the donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. However, this is not your case since your GPs in India are NOT subject to US gift tax. You also do not need to file form 3520 UNLESS the amount of the gift from India exceeds $100K per year.

#2; As mentioned above, a $13k($14K for 2013 as far as I know) maximum tax-free gift in the U.S. per donor to recipient is for a gift between US residents/citizens. All US individuals have the opportunity to give gifts annually to any person without having to file a gift tax return.

Silia_Vox · #3 (**permalink**) 12-08-2014, 05:58 PM

Prompt me please, what to do in Waco on Ñhristmas day?