Friday, July 18, 2014

Wiring Money from Overseas Bank Account vs. Opening a US Bank Account to Gift Money to Kids

From a Gift Tax perspective, it is better for parents to wire money directly from their foreign bank account to their kids in the United States. 

Some parents who live overseas make the mistake of opening a bank account in the United States for the purpose of transferring money to their kids in the United States.  However, that opening a US account and paying from that US account to their kids, makes them have to Pay a gift tax in the United States.

Going back to the first method, if the parents fund transfers take place overseas, then the buyers will not have to pay gift tax.
For full details, check the 3520 gift report form "

Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts

Per bank social, you are allowed $100k per year.
If the buyers are buying the property for investment (rather than to live in themselves), then gifts will not be allowed.

Disclaimer: I am not a tax professional.  Please contact your tax professional for full details.

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