I live in Oregon, my parents live abroad and are not US citizens. They want to gift me some real estate. How much can I be gifted/inherited in OR tax free?

Forum|Forum|4 years ago
August 3, 2022
4 replies
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Critter-3

Level 15

Gifts are not taxable income no matter how much you get and are not reported on an income tax return.

If your parents are not US citizens or residents of the US, there are no US tax implications for them.

If you, as a US person, receive a gift of more than $100,000 from a foreign person, you are required to submit a Form 3520 to the IRS. Form 3520 is an informational form only. You do not report a gift received on your personal tax return, regardless of the amount received.

IRS Form 3520 - http://www.irs.gov/pub/irs-pdf/f3520.pdf

IRS Form 3520 instructions - http://www.irs.gov/pub/irs-pdf/i3520.pdf

http://www.irs.gov/Businesses/Gifts-from-Foreign-Person

pk_

Level 15

@markusmmayer-gmx , agreeing with @Critter-3 , I would like to add a bit of incidental information ( i.e. beyond the information you sought 😞

1. If you are going to be under the US tax laws when you expect to sell the property, you will need the basis of the property. Because it is a gift, the basis is the basis of the donor at the time of gifting. So you need to keep this detail in your file for future use.

2. If what your parents are trying to make sure is that the asset goes to you at their passing ( and not trying to reduce their holdings for tax reasons ), then transfer by inheritance would be more tax advantageous for you ( because the basis will be the Fair Market Value at the time of passing ).

3. Note that assets like land are generally immune from FBAR and FATCA reporting requirments.

Hope all this makes sense to you

If you need more focused reply please consider providing ( a) your citizenship; (b) where the asset is located.

markusmmayer-gmxAuthor

Level 2

Thanks for your answer.

I am a German citizen and the property is in Germany.

The German tax law allows to gift EUR 400k per parent (EUR 800k total) every 10 years tax free to any child.

Housing prices have appreciated a lot, so it's wise to start asset transfer early. I don't file taxes in Germany as I live in the US. The EUR 800k doesn't apply to me, I guess.

Will I have to pay taxes on the gains in the US if I decide to sell the property?

I live in Oregon, isn't there a tax on assets gifted more than $1mio? Could I be gifted the $1mio in consecutive years or is there also something like a 10 year rule?

Thanks!