US TAX GUIDE IN THE UAE

What happens if I receive or give gifts in the UAE?

How do I report gifts given in the UAE?

If you’re a US person giving a gift to a non-US person, you need to report it to the IRS using Form 709. For 2024, the annual gift tax exclusion is $18,000 per recipient. Gifts over this amount must be reported and included in your lifetime exclusion, which is around $11 million.

Is there a difference between loans and gifts?

Yes, loans are not considered gifts. Loans with the intention of repayment are not reported as gifts, but any interest earned must be reported as income.

What should I do if I receive a gift?

If you receive a gift of stock or shares from a non-US person and the total value exceeds $100,000, you must:

  • Report using Form 3520: Report gifts over $100,000.
  • File an FBAR: If the total value of foreign accounts, including the gift, exceeds $10,000.
  • File Form 8938: If the total value of foreign financial assets exceeds certain thresholds.

What should I remember about gift reporting?

  • Separate Reporting: Reporting gifts is separate from capital gains taxes, which apply if you sell the gifted assets.
  • Seek Professional Advice: Consult a tax professional to ensure compliance and accurate reporting.

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