Another gift tax question

There is no problem with receiving gifts from a foreign person as long as you report the gift -- but read the next paragraph. If you receive a gift in excess of 100k from a foreign person, then you must report the gift on form 3520. There is no tax to pay, but a penalty if you fail to report.

However, when did you brother give up his US citizenship or permanent residency (if at all)? If on or after June/17/2008 then the new expatriation rules apply, and he may lose his ability to give unlimited amounts tax free. I think that the limit of 14k per person applies, and giving in excess of this requires the give to file a gift tax return (form 709). If that person does not file a return then the receiver has to pay it somehow.

He can open an account in his own name and transfer his money there. It is full legal for foreigners to open an account here.

I was wondering if the gift is under $10k does it need to be reported on any form? Also, the gift limit is $13k per year but if a married couple gives it is it still $13k? and does it have to be seperate checks from both couples or can it just be a wife or just be a husband?

Is he really giving you the money or are you merely holding it for him because your country (USA?) is safer than his "volatile" country. If you are holding his money for him, then there is/are no gift tax consequences because no gift has occurred.

There will be no US gift tax consequences in any event. The US does not impose gift taxes on gifts from a non-citizen, non- resident. And even if the gift is made to a citizen or resident, the recipient pays no gift or income tax. So from that standpoint it doesn't matter whose money it actually is.

If the money earns income in the US, though, that income is subject to income tax. And either OP or his brother can claim the income and pay it, depending on who the true owner of the money/income is. But one of them has to pay it.

That is not correct. If the foreign person renounced his US citizenship after the new expatriation tax went into effect, then he is treated as a US person for the purpose of the gift tax. If he does not pay the gift tax then the recipient has to. I don't know if this rule is in effect forever or for 10 years only after giving up your Us citizenship after June/17/2008.

Yes, you're right about someone who renounced his citizenship - I think it applies if that happened within the prior ten years.

I didn't notice anything in the OP that would indicate that the brother had renounced US citizenship.