Posts Tagged ‘irs case law’
Question: What’s the best way to transfer money from overseas from proceeds of property owned by US citizen to avoid tax
I’m trying to figure out the best legal way to minimize taxes in transferring funds from overseas. These funds are close to $250K and are proceeds from the sale of property located outside the US, but owned by a US citizen, in this case my father. I am not sure if the gift law would apply here since he’s a citizen. Also, what documentation is required by the IRS?
Answer: 1. If you transfer money, there is no tax implication.
2. You father must report the sale of the property on his U.S. tax return. He must file the tax return if the income is more than the filing limit.
If he paid taxes on the profit in a foreign country, he will get foreign tax credit by filing form 1116.
3. If he owned the house for more than two years and lived in the home, then he may exclude profit from the sale up to $250,000
4. If your father gifts you property or money, there is no gift tax on the receiver of the gift. But person giving the gift must file gift tax return, even he may not owe any taxes as there is a life time exemption of 1 million.
IRS Awards $4.5M to Whistleblower
PHILADELPHIA— An accountant who tipped off the IRS that his employer was skimping on taxes has received $4.5 million in the first IRS whistleblower award. The accountant’s tip netted the IRS $20 million in taxes and interest from the errant financial-services firm. The award represents a 22 percent cut of the taxes recovered. The program, designed to encourage tips in large-scale cases, mandates …
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