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<p>I've been thinking about my step up in basis concern, and I no
longer think it's a concern. If the other spouse gets the
property the basis would be stepped up because they would inherit
the entire property. If anyone else gets the property, the basis
would be stepped up for the same reason. I think the concern
would be converting the property from community property to
tenants in common. There my concern would be only half the
property would get a step up in basis.</p>
<p>But of course, checking with a tax attorney would be prudent.
There may be other estate or income tax concerns.<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
206 723-2148</pre>
<div class="moz-cite-prefix">On 1/12/2021 9:42 PM, Kary Krismer
wrote:<br>
</div>
<blockquote type="cite"
cite="mid:4c347425-3fe6-a294-2988-daba2eca9a82@comcast.net">
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<p>What I meant by raising FIRPTA was whether the couple was
contemplating a future sale and thinking by doing a QCD
beforehand they could avoid FIRPTA. I'm not sure that future
sale would give rise to FIRPTA withholding, but again I'm not
sure it wouldn't either. But I wasn't worried about FIRPTA on
the gift.</p>
<p>As to the step up in basis my concern was that the step up
would only apply to community property, not separate property.
Also a question I don't know the answer to. In the back of my
mind I seem to recall it applies to either type of property, but
that's something I'd want to make sure of.<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
206 723-2148</pre>
<div class="moz-cite-prefix">On 1/12/2021 7:29 PM, John J.
Sullivan wrote:<br>
</div>
<blockquote type="cite"
cite="mid:A1C766C4-5630-4EDD-B46F-FC7494D10522@comcast.net">
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Good points.
<div><br>
</div>
<div>1. No FIRPTA withholding on gifts. No gain realized. </div>
<div><br>
</div>
<div><a
href="https://www.irs.gov/individuals/international-taxpayers/exceptions-from-firpta-withholding"
moz-do-not-send="true">https://www.irs.gov/individuals/international-taxpayers/exceptions-from-firpta-withholding</a></div>
<div><br>
</div>
<div>2. Yes. If NRA spouse died first there would be a step up
in basis even though estate not subject to estate tax.
Perhaps she transfers her interest to a revocable trust for
his benefit? Or somehow achieve whatever the objective is
while not removing it from her gross estate?</div>
<div><br>
</div>
<div><a
href="https://hodgen.com/why-nonresident-decedents-get-step-up-basis-at-death/"
moz-do-not-send="true">https://hodgen.com/why-nonresident-decedents-get-step-up-basis-at-death/</a></div>
<div><br>
</div>
<div>Don’t forget to check any applicable treaty. </div>
<div><br>
</div>
<div>John J. Sullivan<br>
<br>
<div dir="ltr">Sent from my iPhone</div>
<div dir="ltr"><br>
<blockquote type="cite">On Jan 12, 2021, at 7:15 PM, Kary
Krismer <a class="moz-txt-link-rfc2396E"
href="mailto:Krismer@comcast.net" moz-do-not-send="true"><Krismer@comcast.net></a>
wrote:<br>
<br>
</blockquote>
</div>
<blockquote type="cite">
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<p>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.</p>
<p>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.<br>
</p>
<p>It may be the client is wishing to avoid a non-existent
problem and creating a future liability.<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
206 723-2148</pre>
<div class="moz-cite-prefix">On 1/12/2021 6:22 PM, John J.
Sullivan wrote:<br>
</div>
<blockquote type="cite"
cite="mid:810EE85B-2A28-4C66-8076-6D385E74DF5C@comcast.net">
<meta http-equiv="content-type" content="text/html;
charset=UTF-8">
If NRA wife gifts now to citizen husband, the unlimited
marital deduction applies.
<div><br>
</div>
<div>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. </div>
<div><br>
</div>
<div>John J. Sullivan<br>
<br>
<div dir="ltr">Sent from my iPhone</div>
<div dir="ltr"><br>
<blockquote type="cite">On Jan 12, 2021, at 3:42 PM,
Lisa Chiang <a class="moz-txt-link-rfc2396E"
href="mailto:feesimple7@gmail.com"
moz-do-not-send="true"><feesimple7@gmail.com></a>
wrote:<br>
<br>
</blockquote>
</div>
<blockquote type="cite">
<div dir="ltr">
<div dir="ltr">
<div class="gmail_default"
style="font-size:large;color:#351c75">Hi all,</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75">A silly
question, as it's been awhile since I've dealt
with this scenario, so want to be sure:</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75">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). <br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75">Real
estate in WA state acquired as community
property when they both lived and worked
here. <br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75">Client
would like to take his wife off title of WA
house (she's agreeable). <br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><b>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.</b> <br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75">Kind
regards, <br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75">Lisa<br>
</div>
<div class="gmail_default"
style="font-size:large;color:#351c75"><br
clear="all">
</div>
<br>
-- <br>
<div dir="ltr" class="gmail_signature"
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