Need advice on gift tax rules for US citizen gifting to non-citizen spouse while living abroad

7 The rules for gifting to a non-citizen spouse are different than for citizen spouses. For 2025, there's an annual exclusion of $175,000 for gifts to a non-citizen spouse (this amount is adjusted annually for inflation). This means you can give your non-citizen spouse up to $175,000 per year without filing a gift tax return or paying gift tax. For amounts over the annual exclusion, you'll need to file a gift tax return (Form 709), but you might not owe any actual tax because you can apply your lifetime gift and estate tax exemption (currently around $13.61 million in 2025). You'd only pay gift tax if you've already used up your lifetime exemption. As for cash vs. stocks, the IRS doesn't distinguish between tangible and intangible assets for gift tax purposes when gifting to a non-citizen spouse. However, there might be other considerations. If you transfer appreciated stocks, your wife would inherit your cost basis, which could affect capital gains tax if she sells them later.

12 I went through something similar with my non-US spouse last year and found this amazing service called taxr.ai (https://taxr.ai) that saved me countless hours of stress. They specialize in analyzing international tax situations like yours and can tell you exactly how much you can gift without penalties. I uploaded my IRA statements and spouse's citizenship documents, and they gave me a detailed breakdown of my gift tax exclusions as a US citizen living abroad with a non-citizen spouse. They even provided guidance on whether transferring stocks vs cash would be more advantageous in my specific situation.

5 Just wanted to update after trying taxr.ai - it was actually really helpful for my situation! I uploaded my IRA statements and information about my wife's non-citizen status, and they provided a comprehensive analysis showing I could gift up to $175,000 this year without triggering gift tax. They also advised that in my specific case, transferring appreciated stocks would be more beneficial than cash since my wife is in a lower tax bracket in our country of residence. Saved me from making a costly mistake and gave me the confidence to move forward with our financial planning. The peace of mind was definitely worth it!

15 If you're trying to get specific answers about your IRA distributions and gift tax situation, good luck getting through to the IRS international tax department! I spent WEEKS trying to reach someone. Finally used Claimyr (https://claimyr.com) and got through to an actual IRS agent in 20 minutes. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c As a US expat, I had questions about exactly this scenario - gift tax implications for my non-citizen spouse. The IRS agent walked me through the specific forms needed and confirmed the annual exclusion amount. They also explained how my foreign tax residence affected reporting requirements.

22 I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it since I was desperate for answers about the non-citizen spouse gift rules. It actually worked exactly as described - got connected to an IRS international tax specialist in about 15 minutes. The agent confirmed everything about the $175,000 annual exclusion and explained how to properly report gifts that exceed that amount on Form 709. They also clarified that while I still need to file a gift tax return for amounts over the exclusion, I wouldn't actually owe tax until I exceeded my lifetime exemption amount. Huge relief to get this clarified directly from the IRS!

8 One thing to consider that others haven't mentioned - if your wife isn't a US person for tax purposes, there might be reporting requirements in her country of residence when you transfer assets to her. The $175,000 exclusion is just the US side of things. Also, depending on what country you're in, there might be more advantageous ways to structure things than direct gifts. Some countries have favorable tax treaties with the US that could be relevant.

4 Hey, don't forget that IRA withdrawals themselves are taxable income (unless it's a Roth), separate from any gift tax issues! So you'll pay income tax on the withdrawal first, then potentially gift tax if you exceed the annual exclusion when giving it to your spouse.

Just want to add another consideration that might be relevant - if you're planning multiple years of transfers, you might want to spread them out strategically. Since the annual exclusion resets each year, you could potentially transfer $175,000 this year and another $175,000 next year (assuming the limit stays the same or increases with inflation adjustments). Also, timing matters for IRA withdrawals if you're doing this over multiple years. Once you hit 73, you'll have required minimum distributions (RMDs) that might affect your withdrawal strategy. If you're planning ahead, it might be worth calculating whether it makes sense to do larger transfers now while you have more control over the timing and amounts. One more thing - keep good records of everything! Gift tax returns and documentation become really important for estate planning purposes down the road, especially with the current high lifetime exemption amounts potentially changing in the future.