Money gifted to a foreign national by someone in the United States can be used as EB-5 investment funds as long as the gift is accompanied by a deed of gift, is transferred legally, and can be traced to a lawful source. Both parties must further show that they have paid the taxes related to the gifted amount. Thus, both should submit their personal income tax returns for the previous seven years.
The donor must provide the recipient with a gift letter, or deed of gift, reflecting the amount of the gift and stating that the recipient does not need to repay the amount. Furthermore, the supporting documentation needs to confirm that both the person who received the funds and the person who gifted the funds obtained the funds legally. The receiver of the gift must submit a capital source statement showing that they received the EB5 investment funds as a gift and bank statements reflecting its receipt. They should also clearly identify the donor and explain how the donor came to have the funds.
The donor, in turn, must also provide a capital source statement that details how they obtained the gifted amount. The two capital source statements should agree in this regard. Additionally, the donor may need to provide supporting documentation that demonstrates how they obtained the funds. For example, if the funds derive from the sale of a real estate asset, the person may need to provide property purchase and sale records. Depending on the length of ownership of the asset, the person may further need to prove how they came to own the asset.
Because of the potential complexity of EB-5 source-of-funds documentation, the investor should work with an experienced EB-5 practitioner or immigration attorney to ensure United States Citizenship and Immigration Services (USCIS) receives the correct documentation as part of the Form I-526E petition.
