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My Mom who lives in Us since more than 20 years decided to sell the family house in her home country along with other small commercial that she owns in her original home country . She does not have bank account , (she never worked in Us and she is above 70 ) in US and she wants me to transfer the money into my bank account , planning to buy a house later in Us . IIs there any problem or concerns . The value is aroun 350K US ? Any advise

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Your going to take it in the rear from Uncle Sam come tax time. The good'ol USA is one of the only countries that taxes ... (more)

Fsturbo15 (Apr. 19, 2013 @ 6:00p) |

That will not count as "main home". You might want to think how much was paid for the house when she bought it, how much... (more)

Yoksel (Apr. 19, 2013 @ 7:03p) |

Ok, my take -

1. Have some friends/family travelling from your home country to US bring cash with them, so you will not ... (more)

jaina5 (Apr. 22, 2013 @ 7:46a) |


Is she giving you the money? Does she want you to withdraw the $350K and hand it to her(since no bank account)? What is the end goal with the funds. I assume they will be in an offshore bank account after the sale?

If the money's in your bank account, and you get sued for something, it becomes a problem (in terms of the money is at risk).

Also, that sum coming into your bank account will set off fraud flags (same would happen if your mom set up an account and wired in 350K internationally). Your account might get frozen for a while while they investigate.

sami31 said:   My Mom who lives in Us since more than 20 years decided to sell the family house in her home country along with other small commercial that she owns in her original home country . She does not have bank account , (she never worked in Us and she is above 70 ) in US and she wants me to transfer the money into my bank account , planning to buy a house later in Us . IIs there any problem or concerns . The value is aroun 350K US ? Any advise
Can she not open a bank account now?

She may not have "worked" in the US but I am sure she had bills/expenses and a means of supporting that in the 20 years. Sounds strange that she does not have a bank account. Particularly, since she had substantial assets to her name in her original home country.

Is a title company or real estate firm
Used in the foreign sale? Simply have them wire the funds to your account when the sale closes

You can add her name to your bank account if they are hesitant to wire the money to someone with a different name

From what I have seen/experienced, the hassle could be with foreign-side, not US.

For US side, as long as the source of foreign fund is clear and legitimate (which seems like it is), receiving money should not be much of issue.

For foreign side, on the other hand, it can be a little hassle. Many countries seem to have strict regulation related money going out of country. $ 350k should certainly raise some complain and there may be some documentations needed. It all depends on which country it is, but if you hire attorney or other professional in foreign country to take care of these matters there, I am sure it shouldn't be much of issue either. Regardless, it is good to keep that in mind.

What's the country? No G10 county is going to care about a 350k wire out.

I'd be more worried about the wire and currency conversion fees.

Uncle Sam wants his share!

Wait a minute. If the OP's mom is a lawful US Citizen or Resident she should just open her own bank account rather than using him as a nominee. He can obtain power of attorney to do so on her behalf if she's unable to appear in person. Red to me for not reading the OP carefully before posting.

TravelerMSY said:   Wait a minute. If the OP's mom is a lawful US Citizen or Resident she should just open her own bank account rather than using him as a nominee. He can obtain power of attorney to do so on her behalf if she's unable to appear in person. Red to me for not reading the OP carefully before posting.

OP never stated why mom can't open a bank account.

stanolshefski said:   TravelerMSY said:   Wait a minute. If the OP's mom is a lawful US Citizen or Resident she should just open her own bank account rather than using him as a nominee. He can obtain power of attorney to do so on her behalf if she's unable to appear in person. Red to me for not reading the OP carefully before posting.

OP never stated why mom can't open a bank account.

OP never stated that mom can't open a bank account either.

Team , mom can open an account . My question is any issue in wiring the money from tax perspective. She will buy a house , mostly in my name to stay in it. She lives in us for 20 years and I spend on her. This is not the issue , my main question ,any issue regarding the money from ta s perspective , I am wiring the moray in dollar so no issue in conversion

sunspotzsz said:   Uncle Sam wants his share!
That would be my bigger concern vs a relatively simple process of wiring the money.
As a US resident, she owes taxes on the world-wide income unless there's a treaty with her country of origin that says the sale of real estate is taxed at its location. If it's subject to tax there, it doesn't mean the tax will be lower either, especially since she's not a tax resident in that country anymore. Finally, if she puts the money in the OP's account, wouldn't it be subject to the gift tax?

Yoksel said:   sunspotzsz said:   Uncle Sam wants his share!
That would be my bigger concern vs a relatively simple process of wiring the money.
As a US resident, she owes taxes on the world-wide income unless there's a treaty with her country of origin that says the sale of real estate is taxed at its location. If it's subject to tax there, it doesn't mean the tax will be lower either, especially since she's not a tax resident in that country anymore. Finally, if she puts the money in the OP's account, wouldn't it be subject to the gift tax?


For the gift tax question, presumably, OP's mom would gift the $14K exclusion for 2013 to him (and any spouse) and the rest would go against her estate. Both OP and OP's mom would need to file gift tax returns.

That is, assuming, OP's mom is actually gifting the money to him.

not if the gifter is not a US person.
Mom --> third party trusted person --> OP. Problem solved.

http://www.irs.gov/Individuals/How-Do-You-Report-Suspected-Tax-F...

p.s. $350K << $5MM lifetime exclusion

Not so easy to find a trusted person for 350K. Doesn't solve any (and potentially creates more) tax issues.

If Mom is US citizen or resident alien (green card or >183 day physical presence test), she is liable for US tax on worldwide income. That's the rule regardless of how you wire the cash, or try to hide it.

Best for both you and her to open a US bank account and have the funds wired there. Mom should file her own return and report gain or loss on sale (proceeds minus basis).

Team , not sure if you get the subject right. When u sell a house in Us u don't pay taxes as income ? This is the family house that was purchased 35 years ago or even mire in home country . It is a family house so actually my mom and me and brother own it. We sold it along with other old real estate , and the question is there any concern I need to consider wiring 350k . Shall I bring with me the sold houses document or the sales contracts or something like this? . There is no Issue to transfer the money from home country

sami31 said:   Team , not sure if you get the subject right. When u sell a house in Us u don't pay taxes as income ? This is the family house that was purchased 35 years ago or even mire in home country . It is a family house so actually my mom and me and brother own it. We sold it along with other old real estate , and the question is there any concern I need to consider wiring 350k . Shall I bring with me the sold houses document or the sales contracts or something like this? . There is no Issue to transfer the money from home country
Who told you that? If you sell your house in the US for profit, you're liable for the taxes. Depending on the situation, you may be able to exclude the portion of your profit. In general, you must have lived in that house for at least 24 months in the 5 years preceding the sale and that's clearly not the case. If all of you owned shares of the house, technically each of you is liable for their own portion of taxes - that depends on who signed the bill of sale and other details.

sami31 said:   Team , not sure if you get the subject right. When u sell a house in Us u don't pay taxes as income ?

Yes, you do. You can only deduct $250k/$500k of the gain from income in certain situations. If you don't live in the house for 20 years, you do not meet the criteria for excluding the gain.

why not just open an old swiss type bank account (SE Asia is the new place to hide cash, but she may feel better with it maybe in the Caribbean?) and just keep the money over seas? She's 70, what is she going to do with a house?

We lived in the house for the last 25 years ? And had for more than 30 ? We still lived in it when we go in vacation

Your going to take it in the rear from Uncle Sam come tax time. The good'ol USA is one of the only countries that taxes worldwide income because they think its their business what you make outside the country. Luckily it will be filed as long term capital gains and the rate will be much lower than ordinary income.

Also, make sure you confirm the conversion rate from the originating bank in the country of origin where the wire will be sent from to make sure it is in line with that days conversion rates.

Also, international wire codes are different than domestic (which is just the routing number and account number), you need a SWIFT code from your bank in the USA and a few other pieces of information before you head over there.

sami31 said:   We lived in the house for the last 25 years ? And had for more than 30 ? We still lived in it when we go in vacation
That will not count as "main home". You might want to think how much was paid for the house when she bought it, how much the improvements cost, how much the papers show for the sale price - in some countries that amount is drastically different from the real market price.
And you need to talk to a good tax accountant about your options.

Ok, my take -

1. Have some friends/family travelling from your home country to US bring cash with them, so you will not have to declare it as your income. I think each individual can carry upto $10K without any issues. You can use that cash for daily expenses, do not deposit in bank. Or give some cash to US friends and have them write a check. A few thousand $ deposit is OK.

2. For the rest of the money, inflate the cost of selling the house, to lower the profit. Example - Staging of house for selling, maybe you had someone looking after the house and other properties while your mom was here. Show some salary for that person (don't forget to convert local currency into $). Any phone calls, trips to your home country can be counted towards investment. Basically any thing that you can think of inflating the cost and there by reducing the profit will help you lower your taxes.

3. Since your mom does not work, she should get the money in her name, her account, to reduce the tax liability.



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