Foreign Gift Tax in New York?

Question

Hi all,My wife and I are looking into buying our first home and have the following question for New York City (where we currently reside) / Jersey City, NJ (where the property is located) :- I understand that it depends on the lender whether they "allow" gifts as down-payments, correct?- My family lives in Switzerland and I was wondering whether such a wire transfer would have any tax implications? We are talking about approx. 20K. Is there something like a gift tax (not inheritance, just gift) in New York or New York City?

- Are there generally any special implications in such a gifting case (domestic or foreign money)?I tried to google and hit mostly inheritance taxes rather then non-death gift taxes.

Thank you in advance,

Sandro

Ken Dayal · Answer

Account Closed Here are the rules on gifts by non-US person to US persons-

https://www.irs.gov/businesses/gifts-from-foreign-...

Basically, there are no tax implications of gifts by foreign person to US persons.  Only gifts above $100,000 annually need an information return filing on form 3520. Its is an information return only, no taxes will be due. But penalties for non filing are sizable.

If the gift is by a US person, the exclusion limits of 14k per person / 28k joint apply. Amounts above the exclusion would be applied against the donors lifetime exclusion.

There are no gift tax requirements for states.

Laura Williams · Answer

Account Closed

I just looked it up online and looks like you can receive up to 14K a person now without the person giving paying a gift tax. So between you and your wife that would be 28K. Here's the link on the IRS website that you might find helpful https://www.irs.gov/businesses/small-businesses-se...

Oh and was going to also say when I've gotten loans before they always asked to see the last 3 months of bank statements. So you may want to wait until you have the money in your account for 3 months on 3 different months bank statements before applying for a loan otherwise you'll have to explain where the money came from. And you'll want to show some cash reserves in your account as well in addition to the down payment. At least that's what the banks have asked of me in the past. I almost didn't close on a loan before because the bank didn't think I had enough money left over in my checking account after paying the down payment.

Account Closed · Answer

@Laura Williams & @Kanishk Dayal Thank you both very much. That helps a lot!

Account Closed · Answer

@Laura Williams Thank you very much. That certainly helps (makes sense that the gifting person will be taxed).I will check with my Swiss tax accountant and try to find one here.