Final IRS Rules Detail Taxation of Gifts From Expatriates (1)

The Treasury Department and IRS finalized rules Friday detailing how US citizens and residents will be taxed when they receive gifts from certain expatriates.

The final regulations (TD 10027, RIN 1545-BJ43) explain how taxpayers can apply Section 2801 of the tax code—a tax added by the Heroes Earnings Assistance and Relief Tax, or HEART, Act in 2008. The levy applies to certain gifts or bequests from people who gave up US citizenship or permanent residency after June 2008.

In its final regulations, the IRS acknowledged public comments that said the tax on gifts from an expatriate are much ...