Tax - Capital Gains on Stocks

Hi

If I gift my wife shares or an asset in the UK, a UK asset sold in UK bank(she is US CITIZEN, living in UK)

With me who is (UK CITIZEN, living in UK)

Does she need to pay US capital gains tax? (Earning <50k per year)

Not a tax pro, but my understanding is that a USC living in the UK and selling assets must report the capital gain or loss on their IRS return.  Whether or not she pays any US tax on it depends on her US taxable income.  Note that if you gift her assets that are the equivalent of a mutual fund as opposed to individual securities then she would be subject to PFIC taxation which is fairly punitive I believe.

Is he receives gifts above the filing threshold she will file IRS Form 3520. Receipt of a gift does not trigger any US or UK tax. From a US tax perspective she takes on your basis.  If she later sells the asset she may - or may not - owe tax to one or both countries, depending on facts & circumstances. If the gift takes place at roughly the same time as the sale, both the UK & the US tax authorities could ignore the transaction if the sole purpose was to avoid tax.

Is he receives gifts above the filing threshold she will file IRS Form 3520. Receipt of a gift does not trigger any US or UK tax. From a US tax perspective she takes on your basis.  If she later sells the asset she may - or may not - owe tax to one or both countries, depending on facts & circumstances. If the gift takes place at roughly the same time as the sale, both the UK & the US tax authorities could ignore the transaction if the sole purpose was to avoid tax.

Thank you. Essentially, I am at my capital gains limit (12k) and she has used none, therefore I want to use that 12k, but interested in whether the US would tax it. Her income is <25k and so I thought perhaps exempt.

James

Thank you. Essentially, I am at my capital gains limit (12k) and she has used none, therefore I want to use that 12k, but interested in whether the US would tax it. Her income is <25k and so I thought perhaps exempt.

James

Google says that she should probably be okay.

https://www.irs.gov/taxtopics/tc409

Capital Gain Tax Rates
The tax rate on most net capital gain is no higher than 15% for most individuals. Some or all net capital gain may be taxed at 0% if your taxable income is less than $78,750.

A capital gain rate of 15% applies if your taxable income is $78,750 or more but less than $434,550 for single; $488,850 for married filing jointly or qualifying widow(er); $461,700 for head of household, or $244,425 for married filing separately.

However, a net capital gain tax rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate.

Google says that she should probably be okay.

https://www.irs.gov/taxtopics/tc409

Thanks so much, will check