Gift of Real Property to NRA Spouse

[MaxPwr905]

Sold primary residence in 2015 and am over the $250K allowance threshold.

I understand that as a USC I can 'give' my NRA spouse $160K (for 2015) in cash - however can I give her the same amount in real property - that being $160K of my financial interest in our residence?

The thought being that this way - for tax purposes instead of being 50/50 owners of the property - we'd be closer to a 30/70 split - reducing my taxable gains on the home sale. Thanks for the feedback.

[JGCA]

If you file single you exclude $ 250 k gain if you file joint $ 500K. You may be able to filie a joint return even if your spouse is NR to exclude all the gain depends on her income and country of residence. Yu can not give her a portion of the cost basis then use that as a % to exclude te gain you can give her a gift but this has to be a t fair value like cash cost basis would meet this test . If there is a gain to report use sche D if no gain no reporting required. You also must meet the rule of 2 yrs ownership and lived in it 2 yr over the last 5 yrs.

[MGeorge]

Hi MaxPWR,

I don't think you can move your financial interest in your home for US tax purposes. Canada is considered a "community property jurisdiction" and I believe the home ownership would default to 50-50. I know a CPA living in Canada who has taken his name off of the family home completely for the US tax reason. He still has Canadian family law protections, but for US tax purposes, it is his wife's house.

IF you file jointly, you will have double the exemption, but double the gain, so you could be worse off.

Cheers.