# Question about Gift Tax



## celticweb (Mar 26, 2016)

Hi Everyone

Hope you are all having a nice summer.

I thought I would ask this question here to confirm what my research has found on the subject.

If a non-resident alien transfers US based stock to a US citizen as a gift is there any gift tax to pay? Online I have read that intangible property like stock does not trigger gift tax if transferred from a non-resident alien to a US citizen no matter where the stock is situated. Can anyone confirm this?

Thank you.


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## Bevdeforges (Nov 16, 2007)

In general terms, gift tax is related to inheritance tax and, at least in the US, is payable by the person who gave the gift, not by the recipient. So a gift from a non-resident alien is only subject to the gift tax provisions of the country in which the giver is resident.

The gift itself - as long as it meets the definition of "gift" (i.e. is not from an employer to an employee, for example) is not taxable to the recipient if it consists of intangible assets, like stock.

Check either the IRS website or the Wikipedia article on Gift tax in the United States (which is much more readable than much of the material on the IRS site).
Cheers,
Bev


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## celticweb (Mar 26, 2016)

Thanks Bev
and yes this is an outright gift from a non resident alien, non US citizen. I found this online, can't remember where, i don't think it was the IRS website because I doubt it would have been written so clearly but basically says the below. just posting what I found in case it helps someone else. 
and yes i know that if I am gifted US stock, that means future 1099-DIV and what not that will need reporting. I think dividends have been reinvested in these holdings.

What transfers are subject to gift tax?
U.S. gift tax is imposed on “taxable gifts” (total gifts less 
exclusions and deductions) made by U.S. citizens, U.S. 
domiciliaries, and non-U.S. domiciliaries as follows:

U.S. citizens and domiciliaries are subject to gift tax on all 
transfers of property, regardless of where the property is 
located.

Non-U.S. domiciliaries are subject to U.S. gift tax only 
on transfers of tangible personal property situated in the 
United States and real property situated in the United 
States. Gifts of intangible property, regardless of where 
located (such as stocks and bonds), made by a non-U.S. 
domiciliary are not subject to U.S. gift tax.


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## JustLurking (Mar 25, 2015)

Bevdeforges said:


> In general terms, gift tax is related to inheritance tax and, at least in the US, is payable by the person who gave the gift, not by the recipient. So a gift from a non-resident alien is only subject to the gift tax provisions of the country in which the giver is resident.


...except if the non-resident alien giver is a covered expatriate under HEART, where section 2801 applies a 40% tax on gifts received by US persons, levied on the recipient rather than the giver.

Admittedly it is _highly_ unlikely to apply here -- or anywhere for that matter, because the obvious way to sidestep it is to simply cut US persons out of your gift schedule or will if you are a covered expat. But worth calling out since there is a general belief that US recipients can _never_ owe US tax on gifts. True before 2008, but less so since.


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## celticweb (Mar 26, 2016)

Thanks and yes I saw that online a few places but thanks for pointing it out. and the giver is not a covered expat and was never a US citizen.

For the moment i decided not to renounce (not subject to exit tax so no hurry), I am waiting to see the outcome of the election but it is looking unlikely that there will be real change.


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## Bevdeforges (Nov 16, 2007)

The lines to renounce could get very long right after the election - probably no matter either way they go. But I keep thinking that, should the real estate developer win, there's no way he's going to crack down on the income tax issue, nor provide much funding to the IRS, given his personal tax situation. (Oh dear, the things we have to concoct to remain optimistic these days!!! <ggg>)
Cheers,
Bev


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## celticweb (Mar 26, 2016)

Thanks for the warning and I know that we will be at the bottom of the list of priorities. in fact I have been told as much from some reliable sources. still curious to see who wins, and neither candidate is going to be a bed of roses.

Whatever the GOP platform says, I haven't heard Trump make any stand. Hillary comes up with some nonsense about making Fatca easier to swallow. so even more reason to renounce. but since I am not subject to the exit tax, I might as well wait to see the outcome so I make a more informed decision. 
The exchange rate is perfect right now for dual UK/US citizens to renounce that do have the run the exit tax gauntlet. 
I would just like some relief from Fatca to start with. and some hope the tax code will be simplified (not just for us but for all)


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