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?

[Critter-3]

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]

@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. 

pk

[markusmmayer-gmx]

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!

M

[pk]

@markusmmayer-gmx , as I understand  from your post -- you are German citizen, living in the USA.   For federal tax purposes, gifts and inheritances are not taxed .  However, as I pointed out earlier, if you intend to sell the gifted asset while still under US tax laws, it is more tax benign if the  transfer occurred as part of inheritance rather than gift because  your basis  ( cost )  for purposes of gain  computation  for  a gift is the donor's basis.  Thus if you parents spent  only US$100K acquiring and improving the property  30 years ago and the current  fair Market Value ( FMV) of the asset is  US$500K a gift will result in your basis  being US$100K and therefore sale of the asset today will result in  FMV ( US$500K) less  Basis of US$100K ==US$400K gain  and taxed at 20% in the year of the sale-- to you .  However, if it was inheritance then the FMV would be your basis and thus may not be any taxation  for US purposes.  I don't know if your parents have the luxury of  delaying the transfer such that it becomes  inheritance  for you   ( many countries have wealth tax , US does not currently ).

 I don't know if I am answering your real question or not .  If you wish for a more private discussion, you can always PM me and  the questions and answers will be outside this public board.  But even then Personally Identifiable info sharing is discouraged but we can use hypothetical figures to work  things out.   I am assuming here that you are a Green Card holder and  therefore intend  to be under the US tax laws for the foreseeable future.

Gruesse

pk