Buying property abroad

Forum|Forum|1 year ago
January 24, 2025
1 reply
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I am planning to buy property abroad. I don't have bank account there so I am planning to wire money to my sister and she will pay seller. Since there will be large sum, how this needs to be reported to IRS on my tax return?

Best answer by pk12_2

@almi26

(a) which country ?

(b) Are you a US person ( citizen/GreenCard/Resident for Ta purposes ) ?

(c) Generally there is no tax even or reporting requirement when you transfer post tax monies abroad. However, your bank in the US will raise a SAR ( Suspicious Activity Report ) as a matter of course. These usually result in nothing. If the amount is in the millions, and/or to a country on sanction list , you will have to get permission from the US treasury.

Is there more I can do for you ?

pk12_2Answer

Employee

@almi26

(a) which country ?

(b) Are you a US person ( citizen/GreenCard/Resident for Ta purposes ) ?

Is there more I can do for you ?

almi26Author

a/ Montenegro

b/ Yes I have US citizenship

c/ The purchase price will be around $385K.

Since I will be transferring money to my sister account, is this considered a gift for tax purposes. even though she is going to buy property for me and in my name. I gave her authorization to do that.

Then I need to file form 709 correct? I was told, if i send money oversees to any account other than my own, it is considered a gift, no exceptions.

My understanding is that I won't owe any taxes until 12 Million limit is reached.

Thanks

pk12_2

Employee

@almi26 , a beautiful country, from pixes.

I do not believe this is a gift. A gift would be if you gave something ( of value ) to someone and expecting / receiving nothing in return.

In your case you are having your sister providing a service to you -- the money is yours and after the transaction, the property is yours. She is gifting her time/ effort and ac ting as your agent. So I do not believe you have to file a gift form with the IRS.

For future reference, please keep all records of expenses in acquiring this prop. -- whether you use it as income property , second home or whatever , you will need to establish your basis at the time of acquisition.

Is there more I can do for you?