Quit claim deed and Gift tax implications for a resident alien spouse

[KCMO 84]

I am in the middle of removing conditions on my residency and i am september 2016 CSC filer. So like all others i am waiting and got my I551 stamp extension of resident status in september 2017.

 

This month my husband is adding me to our house through quit claim deed , we live in missouri. Now i dont know much about gift tax implicaitons for a resident alien, i understand that IRS views quitclaim deed to spouse as gift  for tax purposes. This house was inherited by my husband via beneficiary deed from his mother after she passed away earlier this month. Its worth 225K , so anyone here has similar experience and any knowledge about gift tax implications , exemptions etc for resident aliens? We file taxes jointly as married filing jointly , have done so for 3 years.

 

Please let me know if you know anything about this.

 

Thanks!

[Boiler 44,824]

Sort of assumed not an issue between spouses but check with your CPA.

[KCMO 84]

10 minutes ago, Boiler said:

Sort of assumed not an issue between spouses but check with your CPA.

If the spouse to whom real estate is gifted via quit claim deed is US citizen then i assume there are no tax implications and perhaps no issues , but for resident alien there could be, i am not sure. I want to know if anyone else has directly dealth with this or has any knowledge about this , what is the exemption amount etc.

[Boiler 44,824]

3 minutes ago, KCMO said:

If the spouse to whom real estate is gifted via quit claim deed is US citizen then i assume there are no tax implications and perhaps no issues , but for resident alien there could be, i am not sure. I want to know if anyone else has directly dealth with this or has any knowledge about this , what is the exemption amount etc.

Why is being a PR different?

[KCMO 84]

1 minute ago, Boiler said:

Why is being a PR different?

I guess US gov is afraid that PR will take all the money and go back to her or his home country without paying any taxes  LOL

[payxibka 10,045]

12 minutes ago, KCMO said:

If the spouse to whom real estate is gifted via quit claim deed is US citizen then i assume there are no tax implications and perhaps no issues , but for resident alien there could be, i am not sure. I want to know if anyone else has directly dealth with this or has any knowledge about this , what is the exemption amount etc.

No taxation differences between a USC and a LPR.  Big differences if the person is a Non resident alien

Edited December 22, 2017 by payxibka

[KCMO 84]

Just now, payxibka said:

No taxation differences between a USC and a LPR.  

For Income tax,  no taxation difference between USC and PR , i understand . Is it so for estate and gift tax ?. BTW i am aware estate tax has usual 5.4 million exemption for both USC and PR spouse but i read online when i search on google that gift tax are a different ball game. It has some sort of low exemption amount for a PR and perhaps unlimited for USC spouse or something. May be you are right. i am still researching and finding all kinds of different answers.

[payxibka 10,045]

4 minutes ago, KCMO said:

For Income tax,  no taxation difference between USC and PR , i understand . Is it so for estate and gift tax ?. BTW i am aware estate tax has usual 5.4 million exemption for both USC and PR spouse but i read online when i search on google that gift tax are a different ball game. It has some sort of low exemption amount for a PR and perhaps unlimited for USC spouse or something. May be you are right. i am still researching and finding all kinds of different answers.

$145,000 annually

[KCMO 84]

14 minutes ago, payxibka said:

$145,000 annually

i dug this up from florida bar website and found it interesting

"
• Transfers to Non-Citizens — Gifts and transfers involving individuals who are not U.S. citizens or permanent residents can present special issues. With gifts, the unlimited marital deduction is not available for gifts to a non-citizen spouse. Instead, there is an annual gift tax exclusion for gifts to a non-citizen spouse in the amount of $149,000 for gifts made in 2017.²¹ This amount is adjusted periodically for inflation. For real property, creating joint ownership between spouses is not considered an immediate gift, but a gift could occur if the ownership is split, or the sale proceeds are not divided properly.² "

 

This could mean that until we sell the property , quit claim deed claiming the property as joint may not be considered as gift ;). Oh well i will research some more. and ofcourse will talk to cpa before filing our taxes. Meanwhile keep your valuable feed back coming

[payxibka 10,045]

2 minutes ago, KCMO said:

i dug this up from florida bar website and found it interesting

"
• Transfers to Non-Citizens — Gifts and transfers involving individuals who are not U.S. citizens or permanent residents can present special issues. With gifts, the unlimited marital deduction is not available for gifts to a non-citizen spouse. Instead, there is an annual gift tax exclusion for gifts to a non-citizen spouse in the amount of $149,000 for gifts made in 2017.²¹ This amount is adjusted periodically for inflation. For real property, creating joint ownership between spouses is not considered an immediate gift, but a gift could occur if the ownership is split, or the sale proceeds are not divided properly.² "

 

This could mean that until we sell the property , quit claim deed claiming the property as joint may not be considered as gift ;). Oh well i will research some more. and ofcourse will talk to cpa before filing our taxes. Meanwhile keep your valuable feed back coming

First of all gift tax returns are not the same as income tax returns and are not handled at the same time or on the same form.  

 

Becoming a joint owner does not constitute a gift, taxation usually does not occur until something is monetized (some exceptions apply)

[Ontarkie 14,128]

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[Italian_in_NYC 259]

There are SUBSTANTIAL differences between USC and LPR when it comes down to gift and estate tax.

A gift from a USC spouse to a green card holder spouse would have an annual exemption of $149,000. Everything in excess of that will use a bit of lifetime exclusion (which carries over to the estate).

However, a quit claim deed to a spouse is not subject to gift tax, so that's a moot point.

[Italian_in_NYC 259]

On ‎12‎/‎22‎/‎2017 at 3:32 PM, payxibka said:

First of all gift tax returns are not the same as income tax returns and are not handled at the same time or on the same form.  

 

Becoming a joint owner does not constitute a gift, taxation usually does not occur until something is monetized (some exceptions apply)

Not necessarily.

A quit claim is not subject to gift tax only the donee is the spouse or a qualified charity.

If the owner transferred half of the property to his/her brother, the transfer would have been subject to gift tax.

[KCMO 84]

Thanks for your feed back guys. When i think about all of this limitations just becoming a citizen feels like a good plan. Lol. Btw we got our quit claim deed notarized today and it will be recorded with the county clerk sometime next week. We will moving to our new house next month.

 

Now another headache is notifying uscis of address change while my i751 is still being processed.Where can i find the step by step guidance as to completeing this process of notifying uscis?

My husband and me ,do we both need to notify separately ,i as i751 petitioner and he as the sponsor of affidavit of support?  I very much appreciate if you can give me the specifics if you have had experience with notifying uscis of  address change  while an appication is being processed. Thanks!