Question by Big-Savok: sale of property in Russia?
My recently widowed mother-in-law will be coming to live with us in the United States. She will be selling a dacha that could be worth about $ 1,000,000. She will bring this money (or find a way to wire it) with her when she comes here. This money will be used to cover her health care needs in her remaining years, and she may use a portion of it to purchase a house for us.
A number of questions come up. First, as a non-citizen who will enter the country without a green card, I will assume no tax liability on her part. But how to transfer such an amount without raising suspicions in the Department of Homeland Security? She doesn’t really know how to do banking, so she will entrust the money to us. Would we need to open an account solely in her name to avoid setting off red flags for the IRS in connection with us? and what if she did buy us a home – would that then make us targets of the IRS for some reason? What if the IRS takes the position that she needs to provide documentation of her property sale, in order to prove the money is hers — how in the world would the IRS deal with Russian documents and the various Russian bureaucracies to verify or validate any of this?
Answers and Views:
Answer by bostonianinmo
As long as she completes the sale before she emigrates to the US, no US taxes will be due.
Moving the money to the US is neither a taxable event, nor will it raise any suspicions from Homeland Security. The safest and most expedient way to transfer the funds would be via wire transfer from her Russian bank to her US bank. The bank will handle any reporting requirements related to the transfer itself.
She may have to file a TD F 90-22.1 report since she would have had signatory authority over a foreign bank account but that’s no big deal either.
As long as she has documentation of the sale and where the funds came from, any questions would be quickly resolved. There’s really nothing for her to worry about.
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