united-states tax-law gift
Becoming a US person after making a gift
<p>US does not have a foreign gift tax. But I had a question on whether someone needs to report it or not. Let's assume I receive a gift from a foreign family member and it is less than 100k$. So as far as I know since this is less than the threshold mentioned, it does not require me to report it to IRS. Also since the donor is also foreigner obviously they don't have to file the form 709.</p>
<p>Now what happens if within the same tax year the family member that gave the gift travels to US and applies to green card via adjustment of status. Does this put some form of burden on the donor or recipient of the gift to report it somewhere? (Note that gift was made before the travel of the donor to US)</p>
<p>Does the answer change if we assume that the total gift value of the donor is more than 100k$ but it is made to different people such that for each it does not surpass 100k$.</p>

<blockquote>
<p>Also since the donor is also foreigner obviously they don't have to
file the form 709.</p>
</blockquote>
<p>The <a href="https://www.irs.gov/instructions/i709" rel="nofollow noreferrer">IRS instructions for form 709</a> has a long section that starts:</p>
<blockquote>
<p><strong>In general</strong>. If you are a citizen or resident of the United States, you must file a gift tax return (whether or not any tax is ultimately
due) in the following situations.</p>
</blockquote>
<p>After that it says</p>
<blockquote>
<p><strong>Who does not need to file.</strong> If you meet all of the following requirements, you are not required to
file Form 709.</p>
</blockquote>
<ul>
<li><p>You made no gifts during the year to your spouse.</p>
</li>
<li><p>You did not give more than $16,000 to any one donee.</p>
</li>
<li><p>All the gifts you made were of present interests.</p>
</li>
</ul>
<p>There is no statement excluding &quot;foreigners&quot;. You may be correct that a &quot;foreigner&quot; does not have to file form 790, but the <a href="https://www.law.cornell.edu/uscode/text/26" rel="nofollow noreferrer">US tax code</a> is not trivial, and does call for focused individualized legal analysis. Your main interest here seems to be the interest of the non-US person, so I assume you know about <em>your</em> obligation to file IRS Form 3520.</p>
<p>A nonresident alien may be <a href="https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens" rel="nofollow noreferrer">obligated to file a tax return</a>, thus any general idea that &quot;foreigners&quot; don't have US tax obligations is incorrect. A person who does not pass the green card test may still pass the <a href="https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" rel="nofollow noreferrer">substantial presence test</a>. In addition, there are tax treaties between the US and some other countries, whereby a person from Sudan isn't treated the same as a person from Norway.</p>
<p>The law regarding income tax, including gifts, is generally stated in terms of the tax year, and not &quot;the moment of the event&quot;. If a person with no legal connection to the US makes a gift of $20,000 to a US person, and within that year becomes a US person (obtains a green card), that US resident will have made a gift within the tax year in excess of the tax-free limit, therefore must file form 709. They or their tax specialist would consult the <a href="https://www.irs.gov/instructions/i709" rel="nofollow noreferrer">instructions on form 709</a>, reading whether there might be an exception for <a href="https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e511" rel="nofollow noreferrer">transfers not subject to tax</a> (esp. educational or medical exclusion) or <a href="https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e1553" rel="nofollow noreferrer">certain gifts to spouse</a>.</p>
<p>Which is a long-winded way of saying &quot;ask your (tax) attorney&quot;.</p>
