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I would like to send money around $80k USD to INR to family in India, to purchase a property. This is the money from my savings and loan.

I read somewhere that If I send more than $14k to a person, then It should be reported to IRS (as gift).

My question is,

  1. If I split the money and send to multiple accounts(India) using xoom/westernunion, will that be a red flag with IRS?
  2. What is the best way to send the money without breaking the law/ getting into trouble?
  • Why are you planning on sending it as $10,000/person? Are you giving the money away to your cousins and in-laws, or is the money for a single purpose but you are structuring your transaction that way for some reason? (And if so, what reason?) – Chris W. Rea Jun 25 at 17:31
  • Why are you planning on sending it as $10,000/person? I read somewhere that if i send more than $14,000 per person (either domestic or international), then I should report that as GIFT to IRS. that's the reason for sending to multiple people. Is the money for a single purpose? Yes, it is for single purpose (reach my family) You are structuring your transaction that way for some reason? (And if so, what reason?) Same as mentioned in 1st answer. May be I am not clear with my question. My question is "what is the best way to send the money without getting into any legal issues"? – Red Burry Jun 25 at 18:50
  • @ChrisW.Rea , updated the description – Red Burry Jun 25 at 19:02
  • I assume you are at least domiciled (live/reside) in the US, correct? Are you married? How many family members are planning to be involved with buying this property? Can you send some this year and some next? – Kevin Jun 25 at 19:27
  • Everyone has a personal lifetime gift/estate tax exclusion that is now $11,400,000 and indexed to inflation, so the easiest and most clearly legal thing to do would be just send your father and mother $15,000 each and just file the appropriate form(s) with your taxes next April. No taxes due now, and nothing more in the future unless you become very wealthy. – Kevin Jun 25 at 19:36
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Sending as gifts

I found a clear statement that you do in fact owe gift tax for gifts made to foreign people (foreign from the perspective of the United States government). There is a $15,000 gift tax exclusion per person per year in 2019. That would be per parent, so you could send $30,000.

If you are married, you and your spouse could each send that amount. So $60,000 if you are married but only $30,000 if you are not.

If your parents are open to having other people on the deed, you could send $15,000 ($30,000 if married) to each person on the deed. You can also send $15,000 ($30,000 if married) to spouses not on the deed (e.g. if you have a sister whose name is on the deed, you could send to both her and her husband).

If we were closer to the end of the year, you could send $15,000 this year and then another $15,000 next year. But I don't know that that helps you. Mentioning for future readers.

If you send more than the limit, you have to file Form 709 saying that you are using part of your estate exemption. That exemption is $11,400,000 in 2019. If your estate is likely to be smaller than this, this might be the simplest method. Just send $15,000 to one parent and the remainder to the other. Your remaining estate tax exclusion would be around $11,350,000.

If you send money to other people with the idea that those people will then gift the money to your parents, that would be tax evasion. If they caught you, they would charge you penalties, even though you won't owe any immediate tax.

Ownership

If you are on the deed, you could send the whole $80,000. Because then it is simply you buying a property, possibly with partners. The relevant section from the IRS:

What is considered a gift?

Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

Being on the deed as an owner of $80,000 worth of the property would be the "full consideration" mentioned.

It's unclear if the $80,000 is the full value of the property or not. If it is, then you would be the sole owner. If not, you would share ownership.

If there is income from the property, you might have to report it in the US. You might have to file Form 1116 to get credited for tax paid in India. But if there is no income, that's not a problem.

If your parents would leave you the property in their will anyway, this would allow you to avoid paying inheritance tax from them.

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