Tax impact of transferring large amount of funds to wife

Forum|Forum|1 year ago
May 15, 2024
1 reply
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Hi TT experts,

My wife and I (we are US permanent residents, but NOT US citizens) wanted to take advantage of opening a new trading account under her name and getting matching % funds from a brokerage (I already have an account with the brokerage and can't get the match). To open her account, we were hoping that I'll transfer money (a large amount: ~$400k+) into her bank (via check, or whatever process the bank suggests) and then she can open the brokerage account under her name.

A few Qs:

1. is there any tax implication under the federal or state (NJ) estate or gift tax if I give her this money?

2. Do I need to file tax forms, or anything later?

3. Is there a limit on how much money I can transfer?

I'm hoping the unlimited marital deduction provision should cover us, but I wanted to be sure.

Super thanks,

Nyc1

Not A Product Question

TomD8

Employee

Per the IRS:

"If your spouse is not a U.S. citizen, the marital deduction for gifts is limited to an annual exclusion of $164,000 for 2022, $175,000 for 2023, and $185,000 for 2024. See IRC § 2523(i)."

See "What can be excluded from gifts?" in this IRS reference:

https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes-for-nonresidents-not-citizens-of-the-united-states

**Answers are correct to the best of my ability but do not constitute tax or legal advice.