Discussion:Estate/Gift Tax Nonresident Alien
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| Revision as of 21:39, 18 December 2008 Guya (Talk | contribs) (You'd also need) ← Previous diff |
Revision as of 22:44, 18 December 2008 Dingodile (Talk | contribs) (Thank you for yo) Next diff → |
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| {{ForumReplyPost|UserID=Guya|Date=18 December 2008|Text=You'd also need to know which is the optimum tax structure in Taiwan or the advice could turn out to be poorly throught through. }} | {{ForumReplyPost|UserID=Guya|Date=18 December 2008|Text=You'd also need to know which is the optimum tax structure in Taiwan or the advice could turn out to be poorly throught through. }} | ||
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| + | {{ForumReplyPost|UserID=Dingodile|Date=18 December 2008|Text=Thank you for your feedback. | ||
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| + | LH2004, I'm curious why you believe a disregarded LLC will not work? It seems to me that the property interests in the LLC would still remain "intangible" for gift tax purposes regardless of the LLC's income tax treatment. Do you have any authority which suggests otherwise? | ||
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| + | Once more, thank you for helping me out.}} | ||
Revision as of 22:44, 18 December 2008
Discussion Forum Index --> Advanced Tax Questions --> Estate/Gift Tax Nonresident Alien
Discussion Forum Index --> Tax Questions --> Estate/Gift Tax Nonresident Alien
| 18 December 2008 | |
| I'm researching an issue for a new client who is a nonresident alien (NRA) from Taiwan, which does not have a treaty with the United States BTW, and owns real property in California. The client is at a fairly advanced age and wants to identify the best strategy to minimize her exposure to estate/gift taxation.
It appears that because the real property's situs is in the United States, it is included in the NRA's estate for estate tax purposes when she dies. BUT if the real property is transferred to a foreign corporation, then it's situs changes to outside of the United States and consequently it is not included for estate tax purpose. Is this correct? Also, the real property is a tangible asset so if it is gifted away, then the giftor is liable for gift tax. BUT if the real property is transferred into an LLC, then the membership interests of the LLC can be gifted away and no gift tax liability will exist because the interests are intangible assets. Is this correct? I've done a fair amount of research on this and these two strategies just seem too easy and good to be true, so my BS detector is going off and I'm doubting myself. Also, I can't find any case or revenue ruling or procedure that indicates one way or another. Thanks in advance. | |
| December 18, 2008 | |
| Yes, using a foreign corporation works. You do need to pay attention to formalities. See Fillman v. U.S., 355 F.2d 632 (Ct. Cl. 1966), a particularly egregious case.
An LLC gains you nothing if it's disregarded. If the LLC checks the box, then it can be a corporation and that will work; you probably would rather use a foreign corporation (including a box-checking LLC which will be disregarded in its home country). | |
| 18 December 2008 | |
| You'd also need to know which is the optimum tax structure in Taiwan or the advice could turn out to be poorly throught through. | |
| 18 December 2008 | |
| Thank you for your feedback.
LH2004, I'm curious why you believe a disregarded LLC will not work? It seems to me that the property interests in the LLC would still remain "intangible" for gift tax purposes regardless of the LLC's income tax treatment. Do you have any authority which suggests otherwise? Once more, thank you for helping me out. | |
