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| The Japanese Gift Tax can be levied upon Joint Tenancy Properties in the U.S. |
| Introduction |
In the U.S., Joint Tenancy is a type of ownership of property in which more than 1 individual owns an undivided interest in the property. An important benefit of joint tenancy is the right of survivorship, the process by which when one joint tenant passes away, his/her interest in the property passes to the other surviving joint tenant(s) without going through the probate process. This article will discuss Joint Tenancy in the context that it is used for real estate.
Japan has its own unique Joint Tenancy for property ownership, which differs in concept and implications from the Joint Tenancy ownership in the U.S. Therefore, Japanese persons who purchase property in the U.S. under Joint Tenancy will need to be aware of possible Japanese tax consequences that might result from such a purchase.
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| Possible Gift Tax to be levied upon Joint Tenancy Ownership |
Gift Tax can possibly be levied upon a Joint Tenancy ownership in the U.S. by the Japanese tax authorities if the purchase price to be paid for the property is not equally divided between and paid for by the joint tenants who purchase the property.
For example, if a married couple from Japan purchase a property in the U.S., and the husband pays for the entire amount of the purchase price (i.e. 100% of the purchase price), and the wife does not pay anything towards it, the Japanese tax authorities is likely to determine that the husband gifted 1/2 or 50% of the property to his wife. The inheritance laws in Japan views such a transaction as a gift under the reasoning that the wife “received some type of benefit without paying any consideration for it.”
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| Ways to Avoid the Gift Tax to be levied upon Joint Tenancy Ownership |
There are ways to reduce your risk of being charged a gift tax by the Japanese tax authorities in the event of purchasing a property in the U.S. If you are a married couple, you can make sure that each spouse pays 50% of the purchase price, and maintain all records that show that both spouses have paid i.e. copies of bank statements for each spouse, copies of wire transfer requests for any money remitted to the U.S. for the purpose of purchasing property there for each spouse, and etc.
If one spouse loans money to the other spouse for the purchase, you can also keep a copy of the loan agreement and any documents that show that the loanee spouse paid back the loan to the loaning spouse over a span of time, such as months or years.
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| Conclusion |
| As the Japanese tax authorities often follow your money trail and are strict about seeking tax payment(s) from you, it can be good for you to be aware of possible Japanese tax implications even when purchasing assets outside of Japan. |
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| I started a podcast for the Hongo Law Office, LLLC! |
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While I will mainly discuss estate planning/administration issues by myself each month, I also welcome guests on my podcast. I am now inviting anyone to be on my show. Please email me at yuka.hongo12@gmail.com if any of you might be interested in appearing as a guest on my show!
Please listen to my third podcast from the link below. For this episode, I invited Craig Wagnild, Esq. as a guest. Craig Wagnild, Esq. is the Managing Partner at the Honolulu law firm Lung Rose Voss & Wagnild where his practice focuses around corporate law and real estate law. He is licensed to practice law in Hawaii and in Washington state. Please enjoy listening to him talk in his excellent Japanese on this episode!
Estate Planning/Administration Issues from Hawaii |
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| Client Comments |
| "Lawyers in the U.S. can be difficult to talk to at times, but I think people find it easy to talk to Ms. Hongo. I also like the fact that Ms. Hongo follows up with her clients on a timely basis." |
| Sachiko Trillo, Honolulu |
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| "Hongo Tsuji Tax & Consulting, our accounting firm, introduced me to Ms. Hongo. I consulted her with regards to estate planning, and I appreciated the fact that she took care of our documents in a timely manner." |
| K.A., Tokyo |
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| "I appreciated Ms. Hongo's professional expertise and the kind way in which she took care of our matter. I am truly happy that she helped us." |
| Mitsuko Seto, Osaka |
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| "Ms. Hongo not only prepared my trust, but also took care of legal matters involving my company. Her fee is reasonable and she follows up with you in a timely manner." |
| S. Suzuki, Company Owner |
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| "Ms. Hongo took care of our matter in a kind manner. We liked the fact that her office was located in Waikiki, near our home." |
| Sugiyama, Waikiki |
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| "I became a successor to 2 condominiums that my wife owned in Hawaii, after my wife passed away. Ms. Hongo took care of our probate matter in a short timeframe of 1 year. We feel very grateful to her." |
| Shuichi Sakamoto, Nasu |
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| "Our clients were very satisfied with Ms. Hongo's service because she was able to explain matters such as probate in an easy-to-understand manner. Ms. Hongo is someone we can rely on for any matter." |
| Noboru Ohhashi, List Sotheby's, Tokyo |
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| "Given that the U.S. real estate recording process and its pertaining laws differ from those of Japan, and it is difficult to learn about them in English, I appreciated Ms. Hongo being able to explain them to me in an understandable manner. I would like to seek her help in the future for other matters." |
| K. Iwasaki, Honolulu |
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| "Ms. Hongo helped me with the estate planning for my real estate in Hawaii. I was glad she was able to help me during her visit in Japan." |
| S.T., Kawasaki |
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| "It was our long-term goal to prepare a trust for our family. We are now able to take the next step in our lives, as Ms. Hongo applied her proficient bilingual skills to efficiently take care of our matter. We are very grateful for what she did for us." |
| A.P., Honolulu |
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| Attorney Yuka Hongo has been included as an honored listee in Marquis Who's Who for 2024. Marquis has chronicled the lives of accomplished individuals and innovators since 1898. |
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| Hongo Law Office LLLC is proud to have been acknowledged as one of the "Best Probate Attorneys in Honolulu for 2025" by Expertise.com. |
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| Attorney Yuka Hongo has been named a 2025 Elite Lawyer in the area of Estate Planning in Hawaii. The award recognizes attorneys who have displayed a high level of competence in their practice. |
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| You're invited to call or email |
"If you have questions about estate planning and administration, please don't hesitate to call. I'll be glad to hear from you." – Yuka
Call (808) 237-9944 or email yuka.hongo12@gmail.com |
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| Meet Yuka Hongo, Esq. |
| Yuka Hongo is a respected estate planning attorney based in Honolulu, Hawaii. She has practiced law for 10 years and is fluent in both English and Japanese. |
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Practice Areas: Yuka represents clients in matters related to estate planning such as the preparation of Trusts, Wills, and the Transfer on Death Deed. She also provides services in the area of estate administration, including probate.
Education: In 2000, Yuka graduated from Oberlin College (Oberlin, OH), where she earned a Bachelor of Arts Degree in Economics and East Asian Studies. In 2004, she graduated from Loyola Law School (Los Angeles, CA), where she earned her Juris Doctor Degree. In 2022, Yuka graduated from Keio University (Tokyo, Japan) where she earned a Master of Laws Degree.
Court Admissions and Bar Memberships: Yuka is a member of the Hawaii, California, the District of Columbia Bar, and New York Bar Associations. Yuka is a member of the Advisory Committee for the Hawaii Tax Institute Program.
Additional Qualifications: Yuka is a Certifying Acceptance Agent who can obtain the ITIN tax number for foreigners in the U.S. In addition, she is a Life Insurance Agent and a licensed Notary Public in the State of Hawaii. Also, Yuka is fully bilingual in Japanese and English and has in-depth legal work experience working with both languages.
Multicultural Background: Yuka has experience living and working in both the U.S. and Japan and has a thorough understanding of both cultures in these two countries. In addition, she loves working with people from other multicultural backgrounds and working on international matters.
Educational Presentations: Yuka has presented seminars in Japan and in the U.S. relating to various estate planning/estate administration issues.
Residence & Interests: Yuka lives in Honolulu, Hawaii and is single. She enjoys scoping out new eateries and restaurants. |
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