I have a student loan account in India (jointly held by me and my father). I need to repay the debt and want to send $50,000 back. Would it attract any gift tax? The student loan was used by me and doesn’t fit the definition of a ‘gift’ - my concern is if such a transaction, to a jointly held foreign account, has any tax/reporting implications.
The loan repayment should not attract gift tax concerns. The IRS says:
You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift. See Gift Tax.
The U.S. foreign reporting requirements concern assets held and/or controlled by you in a foreign account. Transferring money to an overseas account that is not under your name or control would not trigger tax/reporting implications, with the exception of money laundering.
Banks are required to report deposits or withdrawals of more than $10,000 to the IRS.
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