@jyee315 , thank you for your answers and explanation behind what you are planning.
(a) My simple and considered position always is keep it simple. Instead of getting our knickers in a twist and try to cover all possible questions, it would be better to first decide is this a gift or not.
If the whole purpose is to buy a property for your own usage, then the monies transferred is only a means towards ownership & usage. This is not a gift.
There are quite a few cases ( some even in case law ) where a person, for credit history etc. reasons, decides to buy a property, using a friend/relative as the legal owner and therefore mortgagor, lives on the property, pays the mortgage and property taxes --- equitable ownership. IRS challenged the claim for mortgage interest & prop-tax and lost -- because the "facts and circumstances " proved that the despite the title and loan docs. , it was always understood to be a "by and for the equitable owner" property.
So what I understand from your case is that you are funding the purchase, using your "relative" as token/ stand-in owner ( in name only ) -- just as if a trust was holding the title to satisfy the local laws/conditions/ restrictions ( as in Mexico through "fideicomiso" , with 100 year lease terms -- an instrument to achieve ownership / usage/ transfer rights while complying with local ownership restrictions).
(b) Your quote on tax liability for "gifts" to a NRA spouse is true and the reasoning is in the last sentence. I do not believe this is a gift because all you and your spouse are doing is using spouse's ( Note that for tax purposes , your spouse is NOT NRA -- immigration status notwithstanding --- he/she is paying taxes as a "Resident for Tax purposes"-- MFJ) foreign bank account as a money transfer conduit. At the end of the say you both own the asset that you are purchasing, for joint ownership / usage/ transfer rights etc.
For the transfer to be a gift, the acquired asset would have to be solely owned by the spouse and hopefully so documented legally through some kind of post nuptial agreement.
IMHO -- treat this transfer for what it is, a money transfer to an agent in Canada for the purchase of an asset in Canada. Therefore there is no US tax impact.
Is there more i can do for you ?
