Social
How Can Parents Purchase Property in the U.S. for Their Child?
Purchasing real estate in the United States for a child involves more than transferring funds. Ownership structure affects taxation, asset protection, financing eligibility, estate planning, and cross-border compliance.
This guide outlines four common purchase structures — joint ownership, LLC ownership, overseas gifting, and trust ownership — and compares their advantages and legal implications to help families make informed, compliant long-term decisions.
Depending on family structure, tax planning goals, asset protection needs, and long-term holding arrangements, there are generally four common structures parents may use to purchase property in the United States for their child:
1
Joint Purchase Between Parents and Child
Structure:
-
Parents and child jointly sign as buyers.
-
Title can be held as Joint Tenants or Tenants in Common.
-
Mortgage may be applied for using the parents’ income, the child’s income, or jointly.
Advantages:
-
Combined income and assets may improve loan approval odds.
-
Ownership percentages can be structured according to family planning.
-
Clear legal relationship suitable for long-term joint ownership.
Considerations:
Future sale or rental may involve:
-
Capital gains tax
-
Depreciation recapture
-
State and city taxes
-
Cross-border tax reporting obligations
If any seller qualifies as a “foreign person,” disposition of U.S. real property interests may trigger FIRPTA withholding, typically 15% under IRS guidelines.
2
Purchasing Through an LLC (Limited Liability Company)
Structure:
-
Form a U.S. LLC.
-
Members may include parents, child, or parents alone.
-
The LLC acts as the buyer.
-
Financing may include commercial loans (e.g., DSCR) or foreign national programs.
-
Lenders may focus more on rental cash flow and reserves but typically still require guarantor information and asset documentation.
Advantages:
-
Privacy protection (title recorded under company name)
-
Liability isolation (rental risks do not extend to personal assets)
-
Flexible equity structuring
-
Suitable for multi-party investment planning
Considerations:
-
Not recommended for primary residence due to insurance, lending, and tax complexity.
-
Annual maintenance and accounting costs.
-
Primary residence capital gains exclusions generally do not apply under LLC ownership, or application becomes more complex.
-
CPA consultation strongly recommended.
3
Overseas Cash Gift → Child Purchases Individually
Structure:
-
Parents transfer funds from overseas account to child’s U.S. account.
-
Parents sign a Gift Letter confirming funds are non-repayable.
-
Child purchases property as sole owner.
-
If financing, lender will require documentation proving source of funds.
Advantages:
-
Title solely under child’s name (simpler for future sale or rental).
-
If parents are non-U.S. tax residents and gift cash from overseas, U.S. gift tax may not apply in many cases.
-
Potentially lower mortgage rates.
-
Suitable for long-term residence.
Considerations:
-
2025 annual gift tax exclusion: $19,000 per donor per recipient.
-
Gifts exceeding that amount generally require filing Form 709, though not necessarily immediate tax payment.
-
2025 lifetime exemption: $13,990,000.
-
Cross-border gift and reporting rules are complex; CPA consultation recommended.
-
If the child is a U.S. tax resident and receives over $100,000 from foreign individuals in a year, Form 3520reporting may be required.
4
Purchasing Through a Trust
Structure:
-
Parents establish a U.S. revocable or irrevocable trust.
-
Trust acts as buyer.
-
Child designated as beneficiary.
Advantages:
-
Avoids probate.
-
Streamlined inheritance transfer.
-
Enhanced long-term asset protection.
-
Strategic estate planning.
Considerations:
-
Requires attorney setup.
-
Higher setup costs compared to LLC.
-
Tax treatment varies significantly depending on trust type.
-
CPA and estate attorney involvement necessary.
Acre maintains long-term partnerships with accounting firms and law firms. Prior to purchase, our agents coordinate with tax advisors and attorneys to compare different ownership structures in terms of tax reporting, liability allocation, estate planning, and future disposition implications.
During the transaction process, Acre assists in aligning contract terms, title structure, and fund flow with the client’s overall financial and legal strategy — helping families choose a compliant and suitable structure while minimizing potential tax and legal risks.
Submit Your
Request
Tell us what you're looking for —
we’ll take care of the rest.
Contact us on
WeChat
Contact us on
Instagram
