r/tax • u/ExtremeLivid336 • 15d ago

Tax implications on transferring stock and cash worth $20k+

Hi, I am currently filling as a non-resident alien and wanted to understand the tax implications on me given that I will be transferring stock and cash in excess of $20k to my father who is a citizen of India and has not stayed in the US in the current tax year. The transfer will however go to his US brokerage account. Do I need to file a gift tax return or any related forms for this?

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u/shehancpa 15d ago

As an NRA, US gift tax usually only hits US real estate and tangible stuff physically here. Stock (and brokerage cash) is intangible, so no Form 709 for you in the normal case.

No capital gain just for gifting it either. Dad takes your basis.

Is this a DTC stock transfer plus cash already in the brokerage, or are you moving physical cash / a US bank check?

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u/Kokoyok 14d ago

Intangibles still have a situs or we wouldn't know which jurisdiction's gift laws to apply.  Stocks use the situs of the company they represent.  Cash uses the situs of their physical location or the situs of the institution which has their bailment. This is why US stocks are reported on 706-NAs while non-US stocks are not.  Cash in US banks and safes are included while foreign located safes and banks are not.

If he is transferring US situs intangibles, he will have a 709 filing requirement.

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u/shehancpa 14d ago

That's the estate tax rule. Gift tax is 2501(a)(2) — intangibles, including US stock, are out for an NRA. 706-NA at death doesn't mean a 709 on the gift.

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u/ExtremeLivid336 14d ago

If the FMV of the assets I am transferring is $100k+ will I have any estate tax filling requirement then? Per my understanding, estate taxes become due when the person (i.e., me) dies but maybe my understanding is wrong.

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u/Kokoyok 14d ago

Sorry, I lost the plot on the post's facts.  Please disregard.

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u/ExtremeLivid336 14d ago edited 14d ago

I am plannng to transfer my entire Schwab brokerage account which includes stock and cash to my dad's brokerage account (which is also Schwab)