Do I Need to File a Gift Tax Return for Gifts to Non-U.S. Citizen?
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Question:
I have question regarding taxable income. I am a US citizen living in Thailand. Over the next several years I want to build a house with my domestic partner of the the past 22 years who is a Thai citizen. She owns the land and I would provide the funds to build a house on the site. My question is can I just go ahead and use my funds to pay for the construction of a house without the need to pay any tax to the IRS or would it be better for my to declare the funds for the house as a gift to her and file a Gift Tax Form 709 for the amount I will be paying for construction costs?
Response:
It sounds like you’re not going to be an owner of the house, so the payments would be a gift and subject to gift tax reporting just as they would for gifts to U.S. citizens. You are required to file a gift tax return to the extent your payments exceed $18,000 per calendar year (in 2024). (That said, with the combined estate and gift tax threshold at $13 million (to be cut in half to approximately $6.5 million) in 2026, very few estates are subject to the federal estate and gift tax or subject to penalties for not filing gift tax returns.)
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