# Taxes a USD $40k gift



## monchito7 (Oct 22, 2012)

Hi,

My wife is a US Citizen soon to be a Canadian resident (She currently has a work visa) We will be buying a house soon to accommodate the growing family.
Her mom has offered to give us $40K USD (she lives in NY) that we could use as part of the down payment. I've read that if it's a gift then I would be taxed
when crossing the border with the money all I need is to fill out a form as per the Canada Border services agency.

http://www.cbsa-asfc.gc.ca/publications/pub/bsf5052-eng.html

This all seems to good to be true, is it? Thanks to anyone that replies, much appreciated.


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## OhGreatGuru (May 24, 2009)

There is no gift tax in Canada. But your wife and mother-in-law will have to check out whether there are any US tax implications.


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## Spudd (Oct 11, 2011)

I think that border crossing thing only applies if it's cash. Presumably she won't give you 40k in cash, so I don't think you need to worry about that.


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## yyzvoyageur (Apr 10, 2009)

Spudd said:


> I think that border crossing thing only applies if it's cash. Presumably she won't give you 40k in cash, so I don't think you need to worry about that.


It covers more than just cash:

http://www.cbsa-asfc.gc.ca/publications/dm-md/d19/d19-14-1-eng.pdf


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## Spudd (Oct 11, 2011)

How about that! Sorry for the misinformation.


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## blin10 (Jun 27, 2011)

just do a wire transfer


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## monchito7 (Oct 22, 2012)

Wow thanks for all your replies. So yeah, it would most likely be a check or wire transfer. I really hope she doesn't get taxed. I didn't mention this
but I do want to pay her back could I get in trouble because of this, since now it becomes a "loan" what we were thinking was depositing X amount of
money into her bank account every month.

Thanks again


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## OhGreatGuru (May 24, 2009)

See Wikipedia: http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States

I don't pretend to understand the intricacies of it. Your US family needs to look into it.
If gift tax is owed, strangely enough the IRA seems to make the donor pay. Maybe it's easier for them to track than the recipients. But it's also related to the estate tax in the US.

I wouldn't think loans would be taxable.


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## Karen (Jul 24, 2010)

OGG is correct in that the gift would be subject to US gift tax and would be payable by the donor, not the recipient of the gift. So your mother-in-law would owe tax on the gift, but your wife would not.

There is a minimum amount a US taxpayer can gift without it being subject to the tax; that amount was $13,000 per year the last I knew, but I'm not sure if it has changed.


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## monchito7 (Oct 22, 2012)

Thanks everyone, thanks for the link Guru. Yeah, no matter how we do it the government will get their cut. We're no longer going to go ahead with this I wouldn't want her to pay taxes.


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