1 The highest U.S. gift tax rate reaches 40% on the fair market value of gifts worth more than $1 million
2 $15,000 (2021) per person, but can be up to $30,000 from both spouses; IRC Section 2503(b)
3 $159,000 (2021); IRC Section 2523(i)
4 IRC Section 2503(e)
5 This is in stark contrast to U.S. citizens and domiciliaries who have an $11.9 million unified gift and estate tax exemption
6 IRC Section 2501(a)(2)
7 IRC Section 2105(b); Treas. Reg. Section 20.2105-1(k)
8 GCM 369860 (September 24, 1976); PLR 7737063 (June 17, 1977)
9 Transfers made directly to a qualifying educational institution will not be subject to U.S. gift tax; IRC Section 2503(e)
10 IRC Section 1015(a) provides that property acquired by gift shall have the same basis as it would in the hands of the donor except that if such basis is greater than the fair market value of the property at the time of the gift, the basis shall be the fair market value for the purpose of determining loss.
11 See Gregory v. Heverling, 293 U.S. 465 (1935) where the court recharacterized a tax-motivated transaction. The step transaction doctrine, similar to the substance over form doctrine, is applied to prevent tax abuses by combining a series of formally separate steps which produced a certain tax result into a single event.
12 DeGoldschmidt-Rothchild vs. Comm’r; 168 F2d 975 (2d Cir. 1957)
13 See PLR 200340015 (October 3, 2003); PLR 200748008 (Nov 30, 2007); and PLR 201311004 (March 15, 2013)
14 Since the 2010 enactment of the Foreign Account Tax Compliant Act (FATCA), many foreign financial institutions have decided that servicing U.S. taxpayers is not worth the extra administrative work and potential risks, and have declined to open or even maintain accounts for U.S. citizens or residents.
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