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Before I attempted to do the following, I asked questions and other questions on this list and built up a fan base of those who are convinced I am out to cheat the IRS.

It's already a year into this well know crime, with the help of a lawyer in the country where the apartment is and where I live, I transferred the apartment to my daughter.

All parties involved (myself, my spouse, my daughter our lawyer) are very well aware that in about 3 years, we intend to sell the apartment and my daughter will pay off our mortgage and gift the rest back to me.

The country where I live, I was assured by the lawyer, is fine with this setup and will continue to hold me in high regard. Let's make this a given so we can get to the quesion.

The question is, how to deal with the IRS?

My question is, since we expect to sell the apartment down the road and get the benefit of the proceeds one way or another, do I fill out a form 709 for the year 2023 in case the IRS gets an update from the country that I live in that the apartment is now transferred to my daughter or continue to report the rent in my name each year as I have done all along and act that nothing happened and when the apartment is sold one day, the IRS will see it sold under MY name and I just pay the tax based on the gain.

I am trying to avoid paying any taxes or stepping on the toes of the IRS until the apartment is sold.

I thank all you financial experts who have helped me all along. I may not be popular here but I appreciate this list.

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    It is mind-boggling that you persist in asking about this here. As we have told you repeatedly, filing a form reporting a gift when you are not actually giving up control is fraud and perjury. If you don’t like the free advice you’re getting from random strangers on the internet, spend money and hire a professional (but personally I wouldn’t expect a different answer).
    – nobody
    Jan 22 at 14:25
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    Also posting online that you specifically understand this is not a genuine gift situation is a terrible idea. This is evidence that may be used against you in an audit or court case, if you do go through with this plan and get caught.
    – nobody
    Jan 22 at 14:36
  • That's why I am asking how to handle this. Should this be dealt with as a gift or not? Or just leave it as is? Why is this fraud? I am trying to be candid. It's too bad that the IRS doesn't answer the phone, I'd ask them directly to tell me how they want me to handle this.
    – Mr Monee
    Jan 22 at 14:45
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    You have retained a lawyer in the country you live in to advise you on how to structure the transaction there. You should retain a lawyer/ tax professional in the US to advise you on how to report this transaction in the US. Ideally, you would have retained such a professional before entering the foreign transaction to ensure that you didn't do something the IRS would consider tax fraud notwithstanding the other country's position. Jan 22 at 15:16
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    A gift is something given freely, without conditions and without the giver actually retaining control. Transferring title to another person with the intent that they will transfer it back at a certain time is not giving a gift. Reporting such a transaction to the IRS as a gift would be fraud.
    – nobody
    Jan 22 at 17:43

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I am trying to avoid paying any taxes or stepping on the toes of the IRS until the apartment is sold.

These two things are contradictory. You are trying to execute a criminal tax evasion scheme while trying to not step on any of the IRS toes, doesn't work this way.

The US is very good at bullying other countries into reporting for US citizens living there (not even confirmed, just suspected to be US citizens).

It is not unlikely that the IRS will be able to find out, and it is also worth noting that there's no statute of limitations on tax fraud (which is what you're doing here).

It is irrelevant what is legal or not legal in your country of residence, it doesn't matter to the IRS, unless there's some provision in the tax treaty with that country that you can use to your advantage.

As we've said before - you need to talk to a US tax attorney. Since you've already performed some of the actions in your plan, a crime may have already been committed.

Talk to a US lawyer.

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  • So far, all I did was "gift" it in another country. Where is the fraud in that? I can hear that if I reported it as a gift it would be fraud, but if I didn't report anything to the IRS and just continue to report the rental on my 1040, and if it's sold one day, report the sale itself, can this still be somehow fraud to the IRS? They get their money in the end. I feel thick as I do not think this should be a problem. What do you say?
    – Mr Monee
    Jan 22 at 19:40
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    @MrMonee you seem to think that it matters where you do things. It doesn't. You seem to be very well aware that what you've done is illegal in the US, so why do you think that just by being outside the US it suddenly becomes OK? You're still a US citizen bound by the US law. The title has changed, you no longer own the property. It is either a gift or a (deemed) sale.
    – littleadv
    Jan 22 at 19:42
  • My issue is, why can't I gift something outside the U.S. to make another gov't happy, but the IRS can clearly see that it's not a real gift as I still intend to have full benefit from it so I just carry on with the status quo. It's not like I am doing anything in the U.S. that is benefitting from this. Why is it their business? I am a citizen but this is some non standard action for my benefit. Are you sure that this is somehow fraud? Andy why tax evasion, when it's really sold it's reported.
    – Mr Monee
    Jan 22 at 19:48
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    Ask a lawyer. You really need to talk to a US attorney on this one.
    – littleadv
    Jan 22 at 19:50
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    Again, a question to the lawyer
    – littleadv
    Jan 22 at 19:55

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