The Perils of a Foreign Individual Transferring U.S. Real Property for No Value
By Anthony Diosdi When a U.S. estate and gift tax nonresident domiciliary (“Foreign Individual”) gratuitously transfers U.S. real estate to another individual, he or she should be aware of the various U.S. gift and estate tax consequences associated with such a transfer. In addition, the Foreign Individual should also make his or her U.S. legal advisor aware of his or her ultimate goal when transferring such U.S. real property.The example which follows comes from our previous experiences and demonstrates a situation in which a Foreign Individual transfers “or gifts” to another individual U.S. real property without intending to make it a gift for U.S. transfer tax purposes. Transfers of real estate are often made by an elderly and/or sick Foreign Individual who was thinking in terms of avoiding potentially costly…