jmail7[at]andrewmitchel.com wrote:
- quote -

Thanks. Yes, I figured income tax would be payable. I just
wasn't sure that I got the entire store on gift and estate
tax.

Stu

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Stuart A. Bronstein wrote:

- quote -

I would take a look at Section 897(e) and Reg. 1.897-6T. It
appears that you may be exchanging a U.S. real property
interest for a non-U.S. real property interest. If so, then
the transfer would trigger gain recognition.

Regards, Andrew

Andrew Mitchel, CPA, Esq.
Essex, Connecticut
www.andrewmitchel.com

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We had a discussion a while ago involving the effects of the
gift and estate tax on non-citizens who are not US
residents. My recollection was that the conclusion was the
taxes don't apply.

I have a new client who has that issue. On looking into it,
it appears that both the gift and the estate tax apply to
foreigners, to the extent they give or leave property
located in the US. See IRC sectino 2101 et seq. with
respect to estate tax and 2511 with respect to gift tax.

One issue is this:

Foreign resident is sole owner of stock in US corporation
that owns real estate in the US. Under section 2104 the
stock would be included in his estate if he were to die
owning it.

I'm thinking of having him set up a foreign corporation and
exchange his stock in the US corporation for stock in the
foreign corporation. I'm guessing that should solve the
problem.

Am I missing something?

Stu

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