Q.1080 HUF dissolution - Taxes

in USA

Question: Dear sir Namaste. I have following questions. Please guide me. Request you not to put my name while replying. 1) we have HUF a/c in India for more than 50 years. Now we distributing the amount equayy to beneficiary with intention of closing the a/c, keeping some amount in the a/c for paying income tax. I was told that this distribution is tax free in India. Can you tell me how it is treated in USA. As income or as inheritance? If you know any reference in their publication please let me know. 2) please give all the details about gold (coin, jewellary), silver items if one wants to take from India to USA, both at India and USA. US custom web site says you cab bring gold worth $ 10,000. Please confirm. What about Indian custom rules are for gold and silver. 3) income tax refund on NRO -FDs interest ---- is it consider as income on US tax return? Please guide help. I am NRI. with OCI. Answer: Regarding your questions: On partition of HUF there should be no tax liability in India. I believe upon termination of HUF accumulated income/gains would be taxable in the United States. Check with a tax professional for guidance. US tax professional may seek additional information on the source of funding of HUF.

Bringing Gold into United States from

India

The US Customs website does not specify $10,000 for gold. It states: “There is no duty on gold coins, medals or bullion but these items must be declared to a Customs and Border Protection (CBP) Officer.” • The $10,000 amount applies to monetary instruments such as cash, cheque, bank drafts etc. Anything valued over $10,000 must be declared and FinCEN 105 form completed. • Gold must be declared even if value less than $10,000. • For information on Indian customs rules for taking gold check question # 1000.

Tax on Indian Bank Account Interest in

USA

Interest income received from non-resident bank accounts [including FDs] from India is taxable in USA for all Green card holders, PIO, OCI or any US resident. In some cases DTAA can help lower the tax rate but nothing is tax free.