I live in the US and want to give my sister who lives abroad a large amount of money to help her buy a house. I understand I will need to declare that amount which will be deducted by the amount that will be inherited tax free at my death. Do I do that with my tax declaration next year or do I need to do something now?
It’s reported on form 709 which is due 4/15/20 (same as the tax return). You seem to understand the logistics, a form, but no tax due as it just gets counted towards the lifetime exclusion.
From the Sec 709 Instructions
When To File
Form 709 is an annual return. Generally, you must file Form 709 no earlier than January 1, but not later than April 15, of the year after the gift was made. However, in instances when April 15 falls on a Saturday, Sunday, or legal holiday, Form 709 will be due on the next business day.
And (Thanks @DilipSarwate) the form is sent to a different address -
Where To File
Effective January 1, 2019, file Form 709 at the following address.
Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999
If submitting Form 709 by a PDS, mail to:
Internal Revenue Service
333 W. Pershing Road
Kansas City, MO 64108
You don't say how much you want to give your sister, or whether you are married, or whether your sister is married. If both you and your sister are married, you and your spouse can give your sister and her spouse $60,000 per year in four gifts of $15,000 apiece without any tax consequences or tax reporting. If you do this late one year and early the next year, that is $120,000 transferred in a short period of time with no fuss at all.
I don't get it... why do you need to do any of this?
why can't you:
just loan your sister the money. (this might be a problem as the bank might make an issue of it)
buy the place together with her, and write her as the benefactor of your portion of the house in Europe? This way you don't have to pay a gift tax. It is just you buying real estate overseas. And if and when you die, that just passes on to her tax free (for 5.some million dollars)....