Nonresident Alien Gifts

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Do Nonresident Aliens Need to Pay Gift Taxes?

Yes. If a nonresident alien makes a gift of tangible property located in the United States to another person, then the alien needs to pay a gift tax if the gift exceeds the annual gift tax exclusion amount.

What If the Gift Is to a Spouse Who Is a U.S. Citizen?

No gift tax is imposed on a gift made from a nonresident alien to his spouse if the spouse is an American citizen.

On the other hand, a United States citizen making a gift to a nonresident alien spouse is required to pay a gift tax. However, an exclusion amount is available. In 2004, the first $114,000 of such gifts to the nonresident alien spouse are exempt from gift tax.

What About Gifts of Intangible Property?

Gifts of intangible property by a nonresident alien are generally not taxable. Intangible property includes stocks, bonds, life insurance, and notes.

What If the Nonresident Alien's Home Country Also Taxes the Alien?

Most of the time, a tax credit is available against the U.S. gift tax if the country that the nonresident alien is residing in also taxes the gift of tangible property located in the United States. Furthermore, some countries even have tax treaties with the U.S. that deal with this specific problem. These countries include Australia, France, the United Kingdom, and Japan.

Do I Need an Estate Attorney?

If you or a loved one are thinking about making a gift of tangible property, an estate attorney can help you figure out how best to make that gift and help you deal with all of the legal issues that often arise when making a gift. A lawyer can also represent you if you encounter problems while trying to give the gift to another.

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Last Modified: 03-18-2015 10:12 AM PDT

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