# US gift tax consequences?



## BJ100 (Jun 6, 2011)

Hi all, 

I’m a USC who recently returned to the US. My fiancé and I are in the process of applying for an immigrant visa for him to join me in the US. As part of the process we need to show that we have sufficient assets to mitigate concerns about him becoming a public charge. 

Between us we have sufficient assets BUT assets are only considered if they are in my name/account. He has an investment A/c in the US worth ~ $30K. We’re considering liquidating the investment A/c (he is a NRA and will have taxes withheld) and transferring the proceeds into my bank A/c. We’re planning to get married once he has his visa and we’ll probably use this money along with my savings to save for a down payment on a house. 

Would there be any gift tax or any other tax consequences from the money being transferred to my account? Are there any potential pitfalls that we need to be aware of before going down this path? 

Many thanks!


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## BBCWatcher (Dec 28, 2012)

Sure, there are tax consequences! You just described them.

There's a likely simpler, tax-free solution. Is there anything wrong with simply adding your name to the account as a joint account holder?


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## BJ100 (Jun 6, 2011)

BBCWatcher said:


> Sure, there are tax consequences! You just described them.
> 
> There's a likely simpler, tax-free solution. Is there anything wrong with simply adding your name to the account as a joint account holder?


Hi BBCWatcher- thanks for the suggestion! We'll look into whether my name can be added to his account. 

However, as he can't set up a US bank a/c until he moves to the US and has an SSN, we may still have to wire funds from his foreign bank a/c to mine in advance of his arrival. It might be difficult to wire his foreign bank funds to himself after he arrives in the US. 

Aren't gifts reported/assessed during tax reporting season (i.e 04/2015)? If so, would there really be gift tax consequences if we marry before the end of this year? Won't all our funds (whether I send him money or vice versa during the course of 2014) be joint assets from the time we marry? 


Thanks!


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## BBCWatcher (Dec 28, 2012)

The gift reporting limit is $14,000. Gifts above that limit count against lifetime estate exemptions. But there's an unlimited spousal exemption (for U.S. citizen spouses), so you can receive as much as you like from your spouse.

But same thing again: why can't you add your spouse as a joint account holder to any U.S. account receiving funds? And why does he have to transfer funds anyway? Spend funds, sure, but spending is not the same. Low cost ATM, debit, and credit cards facilitate spending in the U.S.


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## BJ100 (Jun 6, 2011)

BBCWatcher said:


> The gift reporting limit is $14,000. Gifts above that limit count against lifetime estate exemptions. But there's an unlimited spousal exemption (for U.S. citizen spouses), so you can receive as much as you like from your spouse.
> 
> But same thing again: why can't you add your spouse as a joint account holder to any U.S. account receiving funds? And why does he have to transfer funds anyway? Spend funds, sure, but spending is not the same. Low cost ATM, debit, and credit cards facilitate spending in the U.S.


Hi BBCWatcher - Sorry for going MIA - have had a lot going on. We are not yet married. We plan to marry following his arrival in the US (because he is not in the US and he doesn't have an SSN, and he is not yet my spouse, I can't add him to my a/cs before he comes to the US). 

We are trying to move his funds to the US in preparation for his arrival. He is in South Africa (SA) where some banks can be very restrictive on foreign wire transfers so it would be preferable for him to wire his money to the US while he is still in SA and can handle in person whatever hassle there is with his bank. I returned to the US from SA earlier this year and had to wire my funds to the US before I left SA because my SA bank insisted on wire funds being requested in person (a process that takes at least 1 hour at the bank). There is no way I'd have been able to wire the funds to myself while in the US. 

RE: ATM/debit/credit cards - imagine yourself returning to the US after working abroad for over 3 years. We're talking savings, pension distributions, etc. accumulated over 3 years. These are not funds that we would spend down using credit cards, atms.

From your previous comment, it sounds like the only choice is for him to wire to me up to the $14000 limit before he lives SA. That's what we'll do Thanks! - We'll have to figure out how to persuade the SA bank to agree to wire funds via telephone/e-mail instructions once he's in the US and I can add him to my A/cs.


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## BBCWatcher (Dec 28, 2012)

You can also get him a supplementary U.S. credit card attached to your U.S. credit card account if you wish. He may not even need a U.S. Social Security number to get one.

What can't you buy in the U.S. when you have both an ATM/debit card (i.e. cash) and a credit card? Not understanding the necessity of moving "all of it NOW." Note I'm assuming low cost debit and credit cards. Moving money is when it costs money, so I'm not sure why you'd/he'd incur that cost upfront. He's _never_ going to spend another rand?

Cash across the border works, too. He can carry less than $10000 total into the U.S. in cash and cash equivalents without needing to make a U.S. declaration. (South Africa may have different rules.) One way to do that (besides cash) is a foreign bank draft. That is, the South African bank creates a paper check (for US$9000 for example) drawn on their partner bank in the U.S.


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## BJ100 (Jun 6, 2011)

Thanks BBCWatcher! I see what you mean about the cost and we'll look into alternatives for mitigating the high costs for bank wire transfers. Had not known about foreign bank drafts - we'll certainly look into whether that might be feasible for us. 

The rand is very volatile and my view is that it has very little upside so we'd want to minimize what's left in SA.


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## BBCWatcher (Dec 28, 2012)

Note that you can carry as much cash (and cash equivalents) into the U.S. if you file Form FinCEN 105. You can do that on the spot when entering the U.S., or you can get the form ahead of time online.

Paper checks can also be mailed, of course. Registered mail is advisable, and declarations may be required.


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