Question: How do taxes on gifts affect EB-5 investment?
Question Detail: I would like to participate in the EB-5 investor program and my uncle may provide me with a gift of $580,000. However, I was wondering what the tax consequences might be for me and my uncle? How might this impact my investment?
Answer: Have your uncle make a personal loan to you with neither interest nor principle due for 6 or 7 years. That time frame would be consistent with most all potential EB-5 regional center investment projects. At the end of those years, you should have gained the equivalent of the loan or more from your EB-5 investment and you can repay your uncle. Remember that all EB-5 investments must be "at risk" so there can be no guarantee on returns. Should your uncle waive repayment of the loan, he could have gifted to you each year the maximum non-taxable gift. There would be tax consequences if the balance due on your loan were forgiven. There are other means but please understand that IBLF is not a tax law firm. For more specific tax information, please refer to your tax counselor. If you need reference to a tax counselor, I can refer a few to you.
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