All Forum Posts by: Account Closed

Hi,

My parents are looking to gift me and my sister some money this year. I did some research into the rules on taxation for gifts from a foreign person and wanted to confirm my understanding (given innumerable loopholes/gotchas in the tax code). Basically from my research, it seems:

1. Monetary gifts from a foreign person (someone who has no direct connection to the US - non citizen, non resident) under $100K are tax-exempt for federal purposes and do not have to be reported to the IRS

2. Monetary gifts from a foreign person over $100K are tax-exempt for federal purposes but have to be reported to the IRS using form 3520

Wanted to confirm that the above is true and then wanted to ask if:

1. Does the above depend on whether the foreign person is immediate family or not? In other words, if the person was a relative instead of a parent, would the gift then be taxable?
2. Does California has any special rules regarding taxing of gifts from a foreign person that deviate from federal rules?

Thanks.

He didn't miss the depreciation; I wasn't aware of it myself. He agreed to amend the form after I reached out to him. However he never mentioned form 3115 to catch-up depreciation; I found this through self-research. He also didn't mention if I can or can't amend the returns after more than 2 years of using a non-approved accounting method (as the previous post has said). 

Thanks.

Yonah,

Thanks for your reply.

1. For the 2nd choice I didn't word it correctly but I think I understand. Basically I pool together the unclaimed depreciation from previous years, add (and subtract) the depreciation for successive years starting from my 2018 return onwards. If any depreciation remains in the pool when I sell the property (say in 5 years), I get a step-up in tax basis by the amount of unclaimed depreciation

2. Once I file the 3115, do you know if I can go back and amend the older returns since now technically I have signaled for a change in accounting method?

3. I did mention the ADS system for foreign properties since I believe the IRS publication talks about it; my CPA was of the opinion that 27.5 yrs is the standard time frame and so we should just do that. Will have to revisit that assumption. I presume I have a choice between straight-line and accelerated depreciation?

I have a foreign rental property that's been in service since 2013. I recently found out I could claim depreciation for it. I contacted a CPA and he said I would need to amend my forms from 2015 on since that's within the 3 year amendment period; he didn't mention anything about the missed depreciation prior to 2015. I did some research on my own and it seems like I can claim that depreciation as well since when I sell the property, the IRS is going to assume that I claimed it whether I actually did or not. However the form/procedure is quite confusing so I was wondering which of the below would be the better alternative:

1. Amend the 2015-2017 forms and either claim the missed depreciation from 2018 on or when I sell the property (assuming its allowed)? Or will I miss the opportunity to claim the missed depreciation because of rules around "changing accounting procedure" etc. (I went through the instructions but found them hard to follow)

2. Skip the amendments for previous years and file a form 3115 along with the 2018 tax form by the due date and claim the depreciation from 2018 onwards?

Thanks.