Background: We live outside the U.S. and file a 1040 each year. We have an apartment outside the U.S. which is slated to be razed and rebuilt over 3-5 years time starting in a few months. (yes, the whole building signed to raze the old building and redo it and not just fix it up. )
We have been renting an apartment for a few years as this has been pending for a while. We finally came to the conclusion that it's better to take a large mortgage despite being middle age and buy something to live in for the next few years, than to rent the current apartment and see the money go to someone else.
In the country where we reside, if one purchases a second apartment, they incur a very large purchase tax on the second (or more) apartment.
We consulted a lawyer in this country and were advised to gift apartment #1 to a child to legally avoid the tax. As long as they recipient owns it for 4 or more years, they can gift it back without any taxes owed.
Question: Given what I write is true and legal, is there any way to approach the IRS to legally be able to avoid paying a gift tax? We really do not want to gift the apartment to a child. This is clearly only being done to avoid paying a purchases tax in the country where we live. No other motive. We really wish to keep ownership of it if we could if it would work out. We'd only gift it to the child with an understanding that we want it back in 4 years or when completed. We have more than one child and we do not wish to favor one over the other buy giving an apartment to them. We also wish to move back into apartment #1 when it's completed. We may not be able to afford the new one and keep apartment #1 and might need to sell #2 at that time. We do not know what will be but this is our current plan.
We are open to gift the child that apartment on condition to gift it back or sign an affidavit saying that the apartment is really ours and we are only doing this to avoid a purchase tax in the country where we reside.
From previous questions I know that there are enough experts on this list to know if there is anything one can do to work this out legally with the IRS. We are looking to this correctly, we're not trying to cheat. We already did our homework in the country where we reside, to our knowledge that country is not being cheated. The tax authority knows about this loophole.
So in short, is there a way one can gift an apartment to a child outside the U.S. and it not be considered gifted from the IRS perspective?
Anyone have ideas?