I've been living abroad for 2 years and work as an expat independent contractor. A friend is willing to open a bank account, on his name, exclusively for my use - so my client will send payments to that bank, and once I return to US, I'll retrieve the money.
As far as I know, 1) I can claim up to $100k tax exemption as such a contractor, and - using my friend's account this way, 2) gift tax kicks in past a certain amount, and 3) it increases my friend's (who has no other income) odds of being audited. Questions:
- Since I can exempt my own tax, can I also exempt the gift tax?
- Are there any other legal/financial considerations?
I agree that generally this trust setup is a terrible idea, but let's put that aside. Also, I'm a US citizen and already have US accounts, though not deposit-ready and there are complications that are simply tedious (and somewhat expensive) to resolve, so I'm checking if there's a simpler alternative. Maybe joint or convenience account?