purchasing a property in india by sending money in USD to the seller

[mn93]

Hi,

I'm purchasing a property in India but the seller is in United States and prefers USD over INR. I need to transfer about $250,000 from my US bank account to the seller's US bank account. Can anyone share the step-by-step instructions on executing this transaction?

Mainly i'm interested in

1. Does this transaction incur any taxes to the buyer? will this be considered a gift and do I need to report it to IRS?
2. Is it better to transfer entire money in one go (or) transfer from multiple accounts to multiple accounts in installments?
3. What agreements/documents should I prepare and get it signed with the seller in order to be on the safe side and have some legal proof for this transaction in case of fraud?

[rjs]

We can only answer tax questions here, not legal questions. Concerning your tax question (#1), paying for the purchase of property is not a gift.

For the rest, you should not be making this purchase without the assistance of a lawyer. The lawyer can advise you on transferring the money and getting the appropriate documents, and can answer any other questions you may have. You should find a lawyer who has a contact in India who can verify the description and ownership of the property.

You seem to be concerned about the possibility of fraud. That's another reason to have a lawyer involved. As far as taxes are concerned, be aware that there is no tax deduction for money lost due to fraud.