Gift Tax Cost Depends On Form and SubstanceGift Tax Cost Depends On Form and Substance
When it comes to the tax cost of a lifetime gift of property, estate planners often focus on the gift taxable value of the transferred asset and, to that end, on the asset's form. In the international context, the focus on form can be even more important. Rules that merely evaporate discounts in the domestic context actually can turn non-taxable gifts into taxable ones in the international context.
N. Todd Angkatavanich & Edward A. Vergara
When it comes to the tax cost of a lifetime gift of property, estate planners often focus on the gift taxable value of the transferred asset and, to that end, on the asset's form. In the international context, the focus on form can be even more important. Rules that merely evaporate discounts in the domestic context actually can turn non-taxable gifts into taxable ones in the international context.
So, the critical question becomes: how do we structure international gifts to ensure they're not taxed?
Rules and Realities
The basic rule is this: An individual who is neither a citizen nor a resident of the United States for U.S. estate and gift tax purposes (let's call them NC/NRs) is subject to U.S. gi...
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