Nonresident Alien Gifts

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Does A Nonresident Alien 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 Nonresident Alien Makes A Gift To His/Her Spouse Who Is An U.S. Citizen?

No gift tax is imposed on a gift made from a nonresident alien to his/her spouse who is an U.S. citizen.

On the other hand, a U.S. citizen making a gift to a nonresident alien spouse is subject to 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 Happens If The Nonresident Alien Makes A Gift Of Intangible Property?

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

What If The Country That The Nonresident Alien Is Residing In Also Taxes The Alien On The Transfer?

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 U.S. Furthermore, some countries even have tax treaties with the U.S. that deals with this specific problem. These countries include Australia, France, United Kingdom, and Japan.

Do I Need an Estate Planning Attorney?

Consultation with an attorney experienced in estate planning is essential to crafting an estate plan that is sensitive to both your needs and those of your loved ones. A lawyer will know which type of will or trust is right for you and will do their best to limit your tax liability

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Last Modified: 06-30-2011 03:20 PM PDT

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