How to transfer money from CDN Grandma to College account

jeepus · Post by **jeepus** » Mon Jun 19, 2006 11:24 am

Hi all.

My Canadian mom wants to tranfer the control of a couple of Canadian bank accounts to my care or to my children, whatever makes the most sense, when I go to visit her in Canada in a few days. My husband and I have become US citizens, which makes both my kids US citizens, so I'd like to know what the best way to do this would be. Would my kids have to file an income tax form if they receive this money? Would it makes sense for us to start a college fund here that we could send the maximum about to for a few years to transfer the money over or is there a way to just move it all at once without losing a lot of it to income tax. I'm not sure if the kids will end up going to college/university here or in Canada at this point, so I don't even know if moving it to the US is the right thing to do.

I'd appreciate your suggestions.

Jeepus

nelsona · Post by **nelsona** » Mon Jun 19, 2006 1:04 pm

Yopur mother is free to give anything to you or your kids with no income tax issues at all, since SHE (the giver) is not a US citizen.

What you do with the money at that point is beyond the scope of this board.

Most 527 plans allow for foreign study.

jeepus · Post by **jeepus** » Tue Jun 20, 2006 12:27 pm

Really?

I mean, I'm sure there's no tax on her side, since she is Canadian, but I would have expected that the IRS would consider it income once it came to any of us now that we are US citizens. So there's no gift tax or whatever involved once we receive it? It will amount to about 30,000 between the two accounts. Thanks for your reply.

nelsona · Post by **nelsona** » Tue Jun 20, 2006 1:04 pm

Gift tax is paid by the US person GIVING the money. it is tied to estate tax, under the premise that giving your money away before dying is an attempt to get around estate tax.

jeepus · Post by **jeepus** » Tue Jun 20, 2006 1:19 pm

Thank You!