Gift Tax Question

[pcmcpa]

If a Rabbi residing in NY receives a $50k gift on the birth of his son, it is not income to him (i.e. it is a gift, not income).

The donor would need to file a gift tax return.

What happens however if the donor is a citizen of a foreign government (residing in the foreign country)? Does US Gift tax law have no juridiction over him? Does he instead go by the gift tax laws, if any in his country?

Thank you in advance for your answers.

[TAXBILLY]

Sec. 2501. Imposition of tax

(a) Taxable transfers

(1) General rule

A tax, computed as provided in section 2502, is hereby imposed

for each calendar year on the transfer of property by gift during

such calendar year by any individual resident or nonresident.

(2) Transfers of intangible property

Except as provided in paragraph (3), paragraph (1) shall not

apply to the transfer of intangible property by a nonresident not

a citizen of the United States.

(3) Exception.--

(A) Certain individuals.--Paragraph (2) shall not

apply in the case of a donor to whom section 877(

applies for the taxable year which includes the date of

the transfer.

( Credit for foreign gift taxes.--The tax

imposed by this section solely by reason of this

paragraph shall be credited with the amount of any gift

tax actually

paid to any foreign country in respect of any gift which

is taxable under this section solely by reason of this

paragraph.

taxbilly

[kcjenkins]

Taxbilly, I edited your post to fix those emoticons that showed up shows up as a big grin when you type a Capital B followed by a ) so if you are copying tax cites, the best thing to do is to turn off the emoticons. That is also what changes a Capital C followed by a ) into the copyright symbol. You can also avoid the conversion by putting a space between the C and the ). (C ) instead of ©

[TAXBILLY]

Thanx KC. I was wondering how that happened.

taxbilly

[JohnH]

KC:

Thanks for clearing up the mystery.

I thought maybe I was just too dense to get Taxbilly's humor today.