Spursfan99
New member
What is the name of your state? MA
Hi Everyone,
For the past few weeks I have been trying to research the best way to move forward with an event that will happen this year. My mother, who is a Non US Citizen, wants to gift us (my brothers family and mine - which include 3 minors and 4 Adults, all US Citizens) around $600,000 that would be used to purchase a Real Estate Property. I intend to find a lawyer in the end to run through this situation but want to be fully educated before starting that conversation. From all my research, an Irrevocable Domestic Trust would work (I preferably wouldn't want the trust to own a Non US holding company, which would then hold the asset but have read conflicting information on Cash being gifted as Tangible or Intangible asset). The wire would come from outside the US (Which I think makes it intangible and not needing an offshore holding company - I could be wrong) into a US bank account which would fund the Real Estate Asset. We would have 7 beneficiaries and after the terms of the trust are met, the property is sold to the ultimate beneficiaries.
I have to spend some time to figure out what our exposure is going to be when the sale takes place in terms of tax that needs to be paid for any appreciation from the cost basis and at what rate. I had a few questions though that I haven't been able to figure out:
1) Does the Trustee have a responsibility to report the gift to the IRS or the beneficiaries? The reason I ask is because normally there is a reporting requirement per person when they receive over $100,000 a year from a Non US resident. While there is no tax liability, I want to ensure the reporting takes place so that we don't get dinged down the line. If it was at the Trustee level, then I would think there is a reporting requirement and if its at a beneficiary level, it probably isn't.
2) If the sale of the property takes place before the minor beneficiary turn 18, can the proceeds remain with in the trust until they are old enough to access it?
If someone thinks there is a better structure that can be used, please do let me know. Any help is greatly appreciated. Thank you.
Hi Everyone,
For the past few weeks I have been trying to research the best way to move forward with an event that will happen this year. My mother, who is a Non US Citizen, wants to gift us (my brothers family and mine - which include 3 minors and 4 Adults, all US Citizens) around $600,000 that would be used to purchase a Real Estate Property. I intend to find a lawyer in the end to run through this situation but want to be fully educated before starting that conversation. From all my research, an Irrevocable Domestic Trust would work (I preferably wouldn't want the trust to own a Non US holding company, which would then hold the asset but have read conflicting information on Cash being gifted as Tangible or Intangible asset). The wire would come from outside the US (Which I think makes it intangible and not needing an offshore holding company - I could be wrong) into a US bank account which would fund the Real Estate Asset. We would have 7 beneficiaries and after the terms of the trust are met, the property is sold to the ultimate beneficiaries.
I have to spend some time to figure out what our exposure is going to be when the sale takes place in terms of tax that needs to be paid for any appreciation from the cost basis and at what rate. I had a few questions though that I haven't been able to figure out:
1) Does the Trustee have a responsibility to report the gift to the IRS or the beneficiaries? The reason I ask is because normally there is a reporting requirement per person when they receive over $100,000 a year from a Non US resident. While there is no tax liability, I want to ensure the reporting takes place so that we don't get dinged down the line. If it was at the Trustee level, then I would think there is a reporting requirement and if its at a beneficiary level, it probably isn't.
2) If the sale of the property takes place before the minor beneficiary turn 18, can the proceeds remain with in the trust until they are old enough to access it?
If someone thinks there is a better structure that can be used, please do let me know. Any help is greatly appreciated. Thank you.