# State taxes?



## sunrise85

Hi guys,

I wanted to get your views on something.

My girlfriend (now fiancee) is a US citizen and moved from South Carolina to the UK in 2007 to study on a student visa. Since then she has worked through several visas to finally attain Indefinite Leave to Remain. When living in the states she never earned enough to file federal returns due to being a student with low-paying jobs, but she did file state returns to get her refund. Since moving here she has not filed an SC state return due to thinking she didn't have to/not realising. Unfortunately SC is a 'sticky' state where you have to prove domecile to be treated as a non-resident. The whole domecile thing is confusing anyway and I've read a lot on it. It seems that if you show intent to move away and sever ties and set up a new home elsewhere with no intention to return then they no longer see you as a resident. But it never says what happens if you do all that and one day return, because surely then they'd try to argue you had always meant to return and it was indefinite?

We spoke to a CPA about this recently and they basically said not to worry or bother with them for a few different reasons. Firstly, the state taxes mirror the federal taxes and SC recognises the foreign earned income exclusion, so had we filed we wouldn't have owed anything anyway. Secondly, even though SC is strict she could probably prove her domecile is here now. She has never renewed a driver's license in SC since, owns no property and the only 'ties' to the state are her family and a bank account (which generates no interest) used to pay the student loan company there. Her bank/loan statements are sent to the UK directly and we visit for a couple of weeks a year but rarely longer. We are getting married there in a few months but will return to the UK to live. She doesn't earn any income in SC at all. Her job is in the UK, she has a driver's license, bank accounts etc.

She began filing federal taxes from the UK in tax year 2009 once she crossed the threshold (timeline below) but, even after speaking to the CPA, I'm interested in other's opinions. As I said, her income would be recognised by the FEIE, but at the same time SC apparently fines $10,000 for non-filing/fraudulent filing. 

Half of me thinks we shouldn't care and half of me is concerned that if her parents became ill and we had to move there one day that we'd be in trouble. The CPA waved off that point and said it wouldn't matter but I still worry.

Do states actively pursue those who haven't filed? How do they know who hasn't? Even if we were 'found' and made to file, would we then just show the previous state returns and they'd apply the FEIE? The CPA seemed to think if there was no tax to actually pay on the federal return then it'd be fine but I'm still paranoid!


Timeline: 

Sep 2007 - moved to UK to study an MA
Oct 2008 - Finished MA
Early 2009 - applied and received Post Study Work visa
August 2010 - applied and recieved FLR(M)/unmarried partner visa 
August 2012 - applied and received ILR


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## sunrise85

Just to clear this up a bit, I suppose I'm asking two questions.

1. If South Carolina got in touch and wanted to find out why she hadn't filed for any year and then made her file, could she still claim the Foreign Earned Income Exclusion? She would have claimed the Foreign Earned Income Exclusion on the federal returns (and SC seems to go from federal returns) so would they still let her claim the exclusion based on that? Would there be a failure to file penalty?

2. If the CPA isn't worried about it, should I be? 

We did explain it clearly to him, but I know they're all different. I personally wonder if she should have filed a state return from tax year 2008 to tax year 2011 because it was only in 2012 she got her Indefinite Leave to Remain (probably proving the UK is her domicile)


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## BBCWatcher

I think I agree with the CPA. But if she's concerned about it she can file federal returns via the streamlined process.

Actually, if she had some earned income in 2010, and if she does not use the Foreign Earned Income Exclusion (FEIE) but uses the Foreign Tax Credit (FTC) instead, she may be able to get $400 from the IRS via the Make Work Pay Tax Credit (MWPTC). That'd be nice.

No, she is not a tax resident of South Carolina. Here are their rules. She must have:

1. An intention to maintain South Carolina as her permanent home, AND;
2. South Carolina must be the center of her financial, social, and family life, AND;
3. While she is away, South Carolina is the place to which she intends to return.

At the very least South Carolina is not the center of her financial life, and she is not physically in South Carolina, so, according to the rules, she fails test #2 and thus is not required to file.

With respect to the U.S. federal requirements, has she filed her FBARs if required? They would be required if she has non-U.S. financial accounts which had a total combined value at any time of US$10,000 or more. The streamlined compliance process linked above also includes getting compliant with FBAR.


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## sunrise85

Thanks for your insight BBCWatcher. 

Just to be clear (because my first post is a mess) she HAS been filing Federal Returns and FBAR since she began earning over the threshold in 2009. So each year those have been done (correctly hopefully!) but she's never filed state returns. 

I don't think South Carolina will bother us over here, but I'm concerned that if her parents become ill and we need to move back over there, for any reason, that as soon as we start filing they'll see a massive gap and ask questions. If that happens and the IRS shows them that returns were filed and we didn't owe anything due to the FEIE being applied, would they be lenient and let us off? Is there a chance of this even happening at all or is my anxiety getting the better of me?

I reckon that it would be hard to prove intent for making the UK her domecile for her first couple of years over here as, until she got ILR in 2012, her visas were temporary and could indicate she would have been returning. 

I'm paranoid they wouldn't see her as a nonresident and tot up interest and penalties for years and years, wiping us out.


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## sunrise85

Also, the state return form you cite also says this under the 'nonresidents' section at the top:

"Did you have South Carolina income tax withheld from your wages?"

-That'd be a no

"Are you a nonresident or part-year resident with South Carolina whose gross income is greater than the federal personal exemption amount?"

-What does that actually mean? She is a nonresident with gross income greater than the federal personal exemption amount (£3,900 is it?) but does it mean money over the exemption amount that was earned in South Carolina?


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## BBCWatcher

sunrise85 said:


> Just to be clear (because my first post is a mess) she HAS been filing Federal Returns and FBAR since she began earning over the threshold in 2009. So each year those have been done (correctly hopefully!) but she's never filed state returns.


Great.



> I don't think South Carolina will bother us over here, but I'm concerned that if her parents become ill and we need to move back over there, for any reason, that as soon as we start filing they'll see a massive gap and ask questions.


Perhaps. They can always ask questions.

Do you think South Carolina wants to _overly_ hassle individuals moving back to South Carolina to pay taxes to South Carolina? Forget everything else, it's not in South Carolina's own self interest to give itself that reputation.



> If that happens and the IRS shows them that returns were filed and we didn't owe anything due to the FEIE being applied, would they be lenient and let us off? Is there a chance of this even happening at all or is my anxiety getting the better of me?


You're asking if the South Carolina tax authorities are going to try to prove that she really, truly passed all three of those tests for filing in order to collect zero tax owed? I suppose anything is possible, but that seems really, really far fetched.



> I reckon that it would be hard to prove intent for making the UK her domecile for her first couple of years over here as, until she got ILR in 2012, her visas were temporary and could indicate she would have been returning.


You know what else is "temporary"? Apartment leases in, say, Kansas. A temporary visa status is not sufficient to trigger a South Carolina filing requirement! She has to pass all three tests in the rulebook in order to be required to file a South Carolina tax return. Look again. See those AND words? She has to pass all three tests to be required to file in South Carolina.



> I'm paranoid they wouldn't see her as a nonresident and tot up interest and penalties for years and years, wiping us out.


Yes, you're paranoid.


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## Bevdeforges

Oh my dear, you certainly do seem to like to look for things to worry about! (Not a criticism, just a comment.)

The fact that your wife has been filing federal returns since 2009 and has heard nothing from the state of South Carolina means that they have "forgotten" about her. I take it she filed her federal returns using a UK address - yet another "proof" that she is no longer resident in SC. And, if she took the FEIE based on the "bona fide resident" test, then that definitely should count her out of the state's clutches.



> "Are you a nonresident or part-year resident with South Carolina whose gross income is greater than the federal personal exemption amount?"


Part-year resident is a no-brainer - normally that refers to someone who has moved out of or into the state during the tax year. Neither applies (obviously) to your wife.

Nonresident in this context implies non-resident taxpayer, which would mean a non-resident *with SC source income*. There are cross-state tax "treaties" and agreements that put some of the international tax treaties to shame. Don't go there if you don't have to!

If you should have to move back there, her physical presence in the UK should be sufficient to "prove" that she has no outstanding tax obligations to the "great" state of SC. 
Cheers,
Bev


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## sunrise85

Thanks guys, both of you.

Yup, I think I do look for problems! It's an awful habit of an anxious person - I basically like guarantees on everything and always worry about doing something wrong and being caught for it.

That all makes sense, maybe I am being paranoid. I envisioned a situation where we'd return in maybe 10 years time and they'd ask her to prove she was a nonresident every year since she last filed. I just didn't know what standard procedure might be and was worried if we received some inheritance or had to go back to live there would be a lot of proving things required.

Here's a question, while I'm here (and this one is less paranoid, promise): We're getting married in SC in October and we've asked guests to give us cash/cheques instead of gifts as we don't own our own house yet in the UK for gifts (just a little one bed flat) and we want some money to buy furniture when we do buy a house or use it to travel.

So, if we're getting the money while in SC and putting it in her bank account there before transferring over does that complicate anything or make us liable to file in SC? I had a feeling the people giving the cash gift have to declare it, not the receivers...


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## Bevdeforges

If she puts the checks in an interest bearing account, she'll have to declare the interest. But just make sure she has changed her address on the account to her UK address. It should be no problem.

And no, gifts are not declarable by either the giver or the recipient - unless, of course, folks are giving you gifts totalling thousands of dollars that might affect their inheritance taxes. (No, don't worry about that.)
Cheers,
Bev


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## Nononymous

Bevdeforges said:


> And no, gifts are not declarable by either the giver or the recipient - unless, of course, folks are giving you gifts totalling thousands of dollars that might affect their inheritance taxes. (No, don't worry about that.)


You probably shouldn't have said that...


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## sunrise85

Go on, give me the lowdown.


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## BBCWatcher

Unless your girlfriend knows somebody with a net worth over $5.25 million who is planning to leave some or all of that money to her (as gifts and inheritances combined), she shouldn't be concerned about U.S. estate taxes. And even then there are worse things than paying taxes on large inheritances, most of which she'd keep.

Anybody giving her more than $14,000 per year may be responsible for paying a U.S. gift tax. Again, that's not her concern -- and especially not her boyfriend's concern.  If anyone pays her education and/or medical expenses directly to the providers the benefactor owes zero U.S. gift tax -- those categories (and a couple others) are exempt.


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## Bevdeforges

Under normal circumstances, gifts are not reportable as income by the recipients. Take a look at this: Frequently Asked Questions on Gift Taxes

The first one under "What is a gift" is the most relevant one - as long as the gift does not exceed the donor's annual exclusion (which is something like $13,000 these days), it can be excluded from consideration. If your fiancé has family or friends who will be giving you more that $13,000 as a wedding present, I want to find a way to get adopted into that family!

You, on the other hand, can accept gifts with no reporting consequences. The line to be drawn there is that if you have to "do" anything in return for the "gift" (getting married doesn't count here), then it's not really a gift.
Cheers,
Bev


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## sunrise85

BBCWatcher said:


> Unless your girlfriend knows somebody with a net worth over $5.25 million who is planning to leave some or all of that money to her (as gifts and inheritances combined)


We wish! 



> Anybody giving her more than $14,000 per year may be responsible for paying a U.S. gift tax. Again, that's not her concern -- and especially not her boyfriend's concern.


Good to know. 

I also looked up SC gift tax - they state that SC has no gift tax at all, so that's good. 

Bev - if someone gives us $13,000 I'll be rather surprised, haha! I'm thinking more like $30-50 per couple or something if they do want to give us something  Yes, she has filed as a bona fide resident I believe. 

I might have to do a bit of research into the UK side of things though. A quick Google last night showed that HMRC says receivers of wedding cash gifts should pay inheritance tax on them if the gift is not given before the wedding or on the day of the wedding ceremony. Problem is we're having a UK party (but no ceremony obviously) a month after the SC one where people might give cash. I'll figure that one out. 

Right, today I'm going to stop worrying about state taxes and all the rest of it. I'm glad I brought these things up though, it's nice to have answers to questions and maybe someone else who is like me (paranoid and anxious, poor devil) will gain something too


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## sunrise85

Sorry, just to be absolutely clear on what you're saying - gifts we receive in South Carolina are not classed as income in South Carolina and we do not need to file a nonresident state return or declare the money on the federal return?


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## sunrise85

Sorry, just to be crystal clear - Am i right in thinking cash gifts we receive in SC will NOT count as income and receiving those gifts does not mean we have to file an SC return as a nonresident with income from an SC source over the federal personal exemption amount? 

So if we're lucky enough to receive maybe $8,000 it doesn't count as income and we don't need to file?


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## BBCWatcher

Correct. In general the recipient of a gift doesn't have to worry about U.S. taxes (state or federal). The benefactor might.


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## sunrise85

Thanks BBCWatcher. 

Interestingly, I found out something new today. I knew my fiancee bought a house with her parents back in 2003 and transferred the deeds to her mother in 2007 before she left, but I didn't realise her name was never taken off the mortgage. The property isn't her mother's primary residence and is rented out. Although my fiancees name is still on the mortgage, her mother makes all mortgage payments and sorts all the taxes related to the house, such as rental income, as I believe she has since they bought it. I'm waiting for confirmation, but I believe the mortgage was paid off by her mother last year, five years after my fiancee first moved to the UK.

Does this change our situation at all regarding state taxes? Does it make it harder to claim she wasn't a resident of SC or does the fact that she transferred the deeds to her mother further prove her intention to leave South Carolina?


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## Bevdeforges

My, you really do like to worry! No, the house shouldn't change your situation - especially given that the deed was transferred, and her mother paid off the mortgage. In fact, the fact that her mother declared all the rental income (and expenses) from the place is probably even better proof that your fiancée is NOT resident in SC. 

And, out of state folks are allowed to own property in SC (or any other state). Given that the state and federal taxes were paid on the income generated by the house, SC is about as happy as they get.
Cheers,
Bev


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## Nononymous

Sounds similar to this.


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## sunrise85

Thanks again.

I just called her mum and she confirmed the mortgage was paid off last year.

I wanted to check because my fiancee filed no state taxes for the tax year of 2007 when she transferred the title/deed/property to her mum. It was transferred for $1, so it wasn't a gift, but I would have thought transferring a property to someone else would be reportable on taxes or something would need to be paid, but maybe it's paid at the time. Her folks said it was done legitimately and a notary signed it, so I'll just have to go on their word.


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## sunrise85

After some online rooting around it looks like a transfer tax is paid upfront to the county. The deed/title she has the copy of is just signed by a notary public so I don't know if that means it was just done in front of them or filed with the country. Hopefully when my fiancee transferred the rights/title/deed for $1 and her mother would have paid a fee of $1.85 for every $500 the house is worth to the county. I'm not an expert, I guess I just have to kick back, stop stressing and assume it was all done properly.


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## BBCWatcher

sunrise85 said:


> I wanted to check because my fiancee filed no state taxes for the tax year of 2007 when she transferred the title/deed/property to her mum. It was transferred for $1, so it wasn't a gift, but I would have thought transferring a property to someone else would be reportable on taxes or something would need to be paid, but maybe it's paid at the time. Her folks said it was done legitimately and a notary signed it, so I'll just have to go on their word.


Well, that's not how it works, actually. U.S. gift taxes are based on the fair market value of the gift at the time of transfer. Presumably the fair market value was more than $1, so it was a gift from your girlfriend to her mother. The deed transfer may have been done legitimately, but the gift tax issue may not be legally settled, strictly speaking. (Although 2007 is a long time ago.)

In 2007 the gift tax threshold was $12,000. So the way it would generally work is that your girlfriend would owe gift tax on the fair market value of her share of the property that she transferred to her mother, less $12,001 (the amount her mother paid for that share plus the 2007 annual gift tax exemption). The marginal tax rate on taxable gift amounts ranged from 18% to 45% in 2007.

Another question is how her name got on the deed in the first place. If she paid for that share, great. If she didn't, the giver (even a parent) probably owed gift tax. Calculating the share is very important. Conceivably, or even probably, that share could be diluted if she was not paying the same share of the maintenance on the property, for example. Theoretically a long period of not paying for maintenance could result in a zero fair market value for her share of the property, though the IRS would want some solid evidence of that finding in a hypothetical examination.

Let's use an example. Let's say your girlfriend's mother and your girlfriend purchased a home in the year 2000 for $100,000. They each paid $10,000 toward a down payment, and the $80,000 remainder was financed with a 5 year fixed rate loan (just to keep things simple). Her mother paid 75% of the mortgage and your girlfriend 25%, and the mortgage was paid off in 2005 on schedule. The property had a fair market value of $150,000 in 2007. For this example there were no documented maintenance expenses affecting the ownership share, and nobody rented the home. Until 2007 both she and her mother lived in the home, again for simplicity.

OK, let's summarize. Your girlfriend's ownership share of the home was 30% because she paid the equivalent of $30,000 of the principle ($10,000 down payment plus $20,000 of the principal worth of the mortgage). When she transferred the property in 2007 that 30% had a fair market value of $45,000. She received $1 for that fair market value, and the 2007 gift tax exemption was $12,000, so the taxable amount was $32,999. The tax owed on a gift of that size in 2007 was $5,340.22 (about 16.1% of that particular taxable amount), plus interest and penalties if applicable.

That's the U.S. federal gift tax. South Carolina might have one on top of that.

And I hesitate to mention all this because you're bound to overreact, so here we go....  Nonetheless, gift taxes are important to know about. Also, the U.S. is not the only country to have them.

Bear in mind also that gifts and transfers can cause problems with U.S. Medicaid, but that's a whole other topic.


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## sunrise85

This is what I was worried about after researching it myself last night. I definitely am worried now and any help would be greatly appreciated.

From what I know, she paid most of the downpayment but the mortgage payments were paid by her mother. My girlfriend lived in the house for a year at one point and since then it has been rented out. I don't even have a clue how we're going to work out what her share was, how much was left on the mortgage, what the value was or anything else, especially since the house has now been paid off.

She had no clue about this and it was never explained that she would have to declare or pay anything. We're both scared. She has been filing federal returns for three years, but presumably this will come up at some point and we can't just ignore it. We want to sort it but I don't know if we can 'back file' for such a thing and what the costs will be. Do we need to speak to a CPA or a lawyer?

Also, I thought you could give a gift over $13k but it would come off your overall inheritance/estate value, or whatever it is, which is over $1m. Is that not correct?


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## Bevdeforges

BBCWatcher is just playing with you - at least I hope he is...

Gift taxes are not generally assessed or dealt with until the death of the donor. And frankly, depending on how your fiancée actually handled the transaction of ceding her interest in the property to her mother, the official in charge of that should have mentioned any tax considerations like that at the time. Real estate transactions in the US are a matter of public record and the Feds have already poured over all transactions that took place in 2007 (or whatever year this happened). If there were a problem, they would have gotten in touch - or will be in touch at some point in the future. 

Frankly, if her only contribution was "most of" the downpayment, then that's pretty much the extent of her participation in the property. (Or at least proportional to the value of the property overall.) Chances are, there will be nothing more about this until and unless she dies with an estate of a size making her subject to the estate tax. Don't let people wind you up on this issue. (And yes, I filed a gift tax return for some money I received from my father that was well above the exemption amount. He died a few years later with no where near the estate tax threshold and that was the end of that.)

You really need to stop looking for possible problems.
Cheers,
Bev


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## sunrise85

Bev, please understand that on this occasion I'm not scrutinising a situation for issues - I believe she owes money for this based on what BBCWatcher is saying. 

As far as I understood, and yes my knowledge is probably nowhere near on par with yours or others on this forum, the gift tax rule is pretty clear that if you give a gift that's over $13k you have to declare it and pay taxes on it. 

We'll be finding out more today but as far as I know my fiancee paid either most or all of the down payment but the mortgage, although in both names, was always handled by her mother in terms of payment.. Her mother thought it best for my fiancee to transfer the deed/title to her before she left to study and live with me in the UK as she believed she probably wouldn't return. I have a copy of the transfer of title but I can't decide what kind of transfer it is. It could be a quit claim deed, it could be a bargain and sale deed but I'm not an expert. I know that the house was paid off last year

As I said, I'll find out more as the day goes on, but it looks to me like gifting someone your half of a house you both own is something that should be reported and paid for. My fiancee was just asked to sign a document, there was no mention of tax implications because the real estate attorneys, or professionals who drew this up and assisted, never mentioned that to her or her parents.


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## Bevdeforges

Reported, maybe, but you don't normally pay gift tax until your estate is being settled. Really and truly. The gift I received from my father was well over the limit. I sent in the gift tax forms and that was that. No money changed hands - and when he died, his remaining estate was so far under the amount where you had to declare anything as to be laughable. 

Filing Estate and Gift Tax Returns for further information. OK, the gift tax return is late. But it's still just a return. The chances are very slim that she will actually owe any taxes on the transaction.
Cheers,
Bev


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## sunrise85

The plot thickens - I did a search of the county the house was in and there is no deed that shows transfer of ownership/title or anything similar. The deeds in place when the house was first purchased are there but no sign on public records that the house was transferred to sole ownership. Now I'm really confused about where we stand and what it all means, especially as a document created by an attorney and signed by a notary public says otherwise.


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## sunrise85

Bev, are you saying your father gave you a gift over the exemption limit but he didn't report it? I'm a little confused.

If we do file a late gift tax return it's going to be a nightmare trying to find out how much it should be for. Hopefully the CPA will help us tonight. If my fiancee files the late gift tax return I assume that's probably going to end up with an audit?


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## BBCWatcher

Whoa, slow down there.  You have a terrible habit of jumping to the worst case fears when you cannot even get past the initial threshold questions. Tax liabilities always have qualification "gateways." If you don't get past the gate, you don't get to the tax. That South Carolina tax residency rule that began this thread was a good example: the word AND (which South Carolina's tax authorities helpfully capitalize) has meaning. You need to satisfy all the conditions joined with the word "and" in order to be a bona fide tax resident of South Carolina. Your girlfriend doesn't pass at least some of those tests, so no problem.

OK, so if there's no actual transfer of ownership interest in the property there's (most probably) no gift. No gift, no gift tax. You never get to the question of gift tax liability if there's no gift. "Stop, do not pass go."

....OK, purely as background and education (since it now seems that since there was no transfer of whatever ownership interest your girlfriend has then there's nothing to worry about), to expand on Bev's point, there's both an annual gift limit and a lifetime gift limit in U.S. tax law. The current (2013) annual limit is $14,000 per recipient, and the current lifetime limit is $5.25 million per donor. There are many exceptions:

1. You can directly pay providers of valid educational and medical services on anyone's behalf without gift tax issues.

2. There is no limit on gifts between U.S. citizen-spouses.

3. The annual gift limit from a U.S. citizen to his/her non-U.S. citizen spouse is $143,000 (2013). The lifetime limit is the same as above (and still per donor).

4. Household expenses -- food and housing, for example -- paid to support spouses and dependents, regardless of their citizenships, are not gifts.

5. There is no gift tax when you donate to a qualified charity. There's actually a tax deduction for that.

There are many, many other aspects to gift and inheritance taxes, but those are the big headlines.

As Bev alludes to, if your girlfriend only paid "most of" the down payment, and if her mother paid the entire mortgage and maintenance expenses (such as property taxes), and if the property is not particularly valuable and did not appreciate significantly, her ownership interest in the property should be very low and could very, very easily be less than $14,000 (or $12,000 in 2007). So if she ever transfers her interest in the property in the future without payment, there could easily be zero gift tax. "It depends," but that's quite possible given the circumstances you describe.


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## sunrise85

I hope you're right BBCWatcher, but we'll find out exactly what the deal is probably in six hours time regarding how much was paid and who paid it. I know the property was bought for less than $70k but I have no idea how much it's worth now. 

As I said, I believe her mother has always paid the mortgage and property tax. I don't know if that is complicated by the house being rented out. 

I'll have more details later tonight from her mother and this CPA and I'll let you know what happens. I think we both feel a little cheated as the company that drafted up this agreement told my fiancee nothing about any tax implications. 

Cheers for your input so far - it's really useful.


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## BBCWatcher

It's vanishingly unlikely there's any gift tax implication on a $70K property where her only participation was paying "most of" the down payment, even if she transferred her ownership interest already.


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## sunrise85

Cheers BBCWatcher. I think we'll find out the relevant info from her mother and leave the CPA out of it for now. Regardless of if she's named on the mortgage, you might be right if there wasn't much put in from her side unless there's some sort of 'equal ownership' rule.


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## Bevdeforges

I don't know about South Carolina (which is a weird state with an even weirder reputation for politics lately), but generally any "equal ownership" rules work only (or work only automatically) between spouses, when a property is held in "joint tenancy" or in "joint and common" interest. Property held by mother and daughter often doesn't fall into this category - but these things do have a tendency to vary by state.
Cheers,
Bev


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## sunrise85

OK, all sorted. Called her folks and CPA last night. The value of the house in the year she signed it over was slightly less than what was still owed on the mortgage, so even if it is classed as a gift (which I'm not sure it can be if there's a mortgage that needs paying on it) it's way below that $12k threshold.

After my fiancee 'gifted' it (again, not sure something is a gift when there is a constant payment attached) her mother didn't remove her name on the mortgage so it was still a joint mortgage until it was paid off last year. The CPA says it was her mother's responsibility to remove her from the mortgage though,my fiancees half of the house had been signed over so that was that.

Yeah, not sure whether it was joint tenancy, tenancy in common or what - deeds never mentioned that, they just showed both names. My fiancee only put $5k into the house (most of the deposit) and the rest has always been paid by her mum.


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## sunrise85

So essentially the equity of the house (fair market value minus outstanding mortgage) was either $0 or -$1,000 or thereabouts as the value had gone down around 10% since it was purchased a few years before. That means my fiancee gave away little or no equity at all. Does that sound right?


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## Bevdeforges

sunrise85 said:


> So essentially the equity of the house (fair market value minus outstanding mortgage) was either $0 or -$1,000 or thereabouts as the value had gone down around 10% since it was purchased a few years before. That means my fiancee gave away little or no equity at all. Does that sound right?


Yup. 
Cheers,
Bev


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## sunrise85

Sorted  

Cheers to both of you. I've learned a lot in the last few days and your knowledge has been invaluable.


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