topic Receiving donation of foreign property in Deductions & credits

Receiving donation of foreign property

giuliana — Thu, 26 Jan 2023 18:32:19 GMT

Hi, I am about to receive a donation of a property located in Italy from my dad. The value of the property is more than $100k and I am not going to sell it. I know that I'll need to submit the 3520 form because the value exceeds $100k. My question is if I'll need to pay us taxes on the donation. Is it considered capital gain?

Thanks

Re: Receiving donation of foreign property

DaveF1006 — Thu, 26 Jan 2023 21:03:47 GMT

No, foreign gifts are not taxable and this is not considered a capital gain. The only requirement you are faced with is filing the 3520 reporting the gift.

Re: Receiving donation of foreign property

giuliana — Sun, 29 Jan 2023 14:57:33 GMT

thank you!

Re: Receiving donation of foreign property

ErnieS0 — Sun, 29 Jan 2023 17:28:21 GMT

You may have a capital gain or loss when you sell the property. U.S. citizens and resident aliens are taxed on worldwide income so the sale of a property in Italy would generally be a taxable event.

You don’t say whether this is business, investment, or personal property. Capital gains from all types of property are taxable. You can deduct losses from the sale of a business or investment property, but losses from the sale of personal property (second home) are not deductible.

The cost of figuring the profit/loss from the sale of gifted property depends on whether it was sold for a gain or loss.

See What is the basis of property received as a gift?