All Forum Posts by: James Gould

Situation: A foreign (non-resident alien) owner of US in situs real estate (two single family properties) wants to transfer the properties to their adult child, who is a US citizen. However, to my understanding, there is a significant tax burden (whether that be estate or gift tax) on this transfer/gift, since non-resident aliens do not enjoy the same large exclusions as US citizens and permanent residents.

Question: What is the best method to transfer this property from the non-resident alien parents to their US citizen child, without incurring a tax burden (or, at the least, minimizing the burden)?

One of the ways I see this being possible is transferring the property through a US or foreign corporation. This would take advantage of the tax law in which gift tax is not imposed on intangible property held by the non-resident alien. The transferor would, in this case, transfer shares/control in the corporation to the US child, and these shares would represent control of the underlying asset (the actual properties). Is my interpretation correct, and what are the best ways to approach this?