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Posted by removeps-groups@yahoo.com on April 4, 2008, 11:00 pm
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> 1. Prior to her immigration, non resident alien wife direct wire transfers
> $12,000 of her non-US foreign company income) to American husband's checking
> account so he can pay off a car loan. He saves all documentation regarding
> the transfer, source of money and loan payoff.
>
> Any reporting requirements or any futuretaxconsequences?
No. Only gifts over 100k have to be reported on form 3520 within 90
days of the event, and the penalty for not reporting is 5% of the gift
up to a total of 25%. It should in my opinion be 5 to 25% of the
amount over 100k, but that's another story.
http://www.irs.gov/pub/irs-pdf/i3520.pdf
The spouse who is a US person must pay taxes on gifts he gives to his
spouse who is not a US person, on the amount above a certain
threshold. The threshold is currently 125k. Note that the general
annual gift exclusion is 12k.
http://www.irs.gov/formspubs/article/0,,id=112782,00.html
If the US person is married to a foreign person of the same sex, and
in the other country this is recognized as a valid marriage, then
would the 125k or the 12k limit apply? I'm guessing that the US would
not recognize the marriage, and the 12k limit would apply.
Here is an interesting article:
http://www.us.kpmg.com/microsite/tax/ies/tea/autumn2002/stories/article01.htm
> 2. Prior to her immigration, non resident alien wife direct wire transfers
> the balance of her savings and foreign job severance pay from her foreign
> bank account to her husband's account. The amount is $100,000 of foreign
> earned income. Her name cannot be added to the bank account until after her
> arrival and she obtains a Social Security number.
Yes, a form 3520 must be filed because the total gifts received for
the year is 112k. Even at 90k I would file just to avoid a penalty.
> Would she be better off leaving the entire balance in her foreign bank
> account and using an ATM card here in the US to make withdrawals as needed?
Probably yes because the dollar keeps dropping.
> What would happen once she is in the US and wants to use an ATM card to make
> periodic withdrawals of the money if it is transferred to a domestic
> account? Futuretaxconsequences? Reporting requirements?
If the account is still in her name, there are no reporting
requirements. It's her own money being transferred.
> 3. Man takes out a $30,000 auto loan to purchase a vehicle. Several years
> later he finishes paying off the loan with the total payoff totaling about
> $36,000 including interest. He then sells the vehicle, receiving a cashiers
> or personal check for $20,000, which is the exact blue book value.
This question is almost the same as: If I buy something for X for
personal use then sell it for Y where Y is less than X, do I have to
pay taxes? I think the answer is no. Hope someone can qualify this.
> When he deposits the 20K in his bank account, will this be reported to the
> IRS under the Currency Reporting Act? Can the sale of the vehicle be
> reported on his 2008 Form 1040 as a depreciation write-off? Other future
> consequences or reporting requirements?
There's no depreciation write-off. If anything, when you sell
property, you have to recapture depreciation (meaning roughly pay back
the taxes you deducted in earlier years). However, only business
property (includes rental property or portion of your personal home
used for business) is subject to depreciation. I'm guessing that the
deposit of 20k would be a reported, but a transfer of 20k between my
various accounts at the same institution would not.
--
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