[WSBARP] Taking non resident alien spouse off title of real estate - tax issues

[Kary Krismer]

I would take a step back, and if this is just about FIRPTA, find out if 
FIRPTA would even apply with a US Citizen still on title. I sort of 
doubt it would since they would have a taxpayer to reach, but I don't 
know that.

And then I would think about the step up in basis on death of community 
property when a spouse passes away, and find out whether you'd be giving 
that away.  Without this transfer and a step up in basis there'd likely 
be little or no gain for several years, and even if FIRPTA applied any 
money taken would be paid back upon filing a return.  Note that step up 
in basis would apply whichever spouse dies first.

It may be the client is wishing to avoid a non-existent problem and 
creating a future liability.

Kary L. Krismer
206 723-2148

On 1/12/2021 6:22 PM, John J. Sullivan wrote:
> If NRA wife gifts now to citizen husband, the unlimited marital 
> deduction applies.
>
> I would specify it’s to create separate property and claim that REET 
> exemption so if she dies her estate has no CP interest in US source 
> property.
>
> John J. Sullivan
>
> Sent from my iPhone
>
>> On Jan 12, 2021, at 3:42 PM, Lisa Chiang <feesimple7 at gmail.com> wrote:
>>
>> 
>> Hi all,
>>
>> A silly question, as it's been awhile since I've dealt with this 
>> scenario, so want to be sure:
>>
>> Client is U.S. citizen.  Wife used to hold a green card, which she 
>> gave up after they moved overseas a decade ago.  IRS deems her to be 
>> a non resident alien (NRA) for tax purposes. Kids are also U.S. 
>> citizens (all minors currently).
>>
>> Real estate in WA state acquired as community property when they both 
>> lived and worked here.
>>
>> Client would like to take his wife off title of WA house (she's 
>> agreeable).
>>
>> *Wondering about gift tax issues before we proceed.  (Will prepare 
>> QDOT for other liquid assets). Any thoughts or wisdom from the group 
>> is greatly appreciated.*
>>
>> Kind regards,
>> Lisa
>>
>>
>> -- 
>> /
>> /
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