Personal gift fund from friends over sea?
12-22-2011, 10:30 AM
#1
Registered User
Thread Starter
Join Date: Nov 2001
Location: socal
Posts: 6,006
Likes: 0
Received 0 Likes
on
0 Posts
Personal gift fund from friends over sea?
My friend has a question about receiving personal gift funds from overseas. He has a relative that want to help him purchase his first house here by sending him some personal gift funds. He wonder what's the max amount that he can receive without having to pay tax on it? And which form does he needs to fill out to report the amount to IRS so everything is legal.
I looked online and seems like the first $100k is tax free, but you do have to repor it to the IRS.
Anybody knows more detail? Thanks.
I looked online and seems like the first $100k is tax free, but you do have to repor it to the IRS.
Anybody knows more detail? Thanks.
12-28-2011, 08:54 AM
#3
Registered User
Join Date: Aug 2008
Location: Downtown Jacksonville
Posts: 193
Likes: 0
Received 0 Likes
on
0 Posts
Form 3520 is used to report foreign gifts (any $ received from a non-US person or entity that you wish to treat as a gift). Tuition, medical expenses and certain distributions do not fall under the term " foreign gifts."
Whether or not you need to report the gift depends on who gave the gift:
For gifts from a nonresident alien or foreign estate, reporting of gifts over $5,000 is required only if the aggregate amount of gifts from that person exceeds $100,000 during the tax year.
For gifts from foreign corporations and foreign partnerships, the reporting threshold amount is an inflation adjusted aggregate amount of gifts of $14,375 for tax years beginning in 2011. For gifts made in 2012, the reporting threshold is $14,723.
In general, the person giving the gift is the one who pays the tax, not the one receiving it. In any event, because IRS penalties for matters dealing with foreign transactions can be extremely high, i suggest you tell your friend to consult with a licensed tax attorney or CPA in your state before doing anything, just so he can be sure he's following the letter of the law.
Whether or not you need to report the gift depends on who gave the gift:
For gifts from a nonresident alien or foreign estate, reporting of gifts over $5,000 is required only if the aggregate amount of gifts from that person exceeds $100,000 during the tax year.
For gifts from foreign corporations and foreign partnerships, the reporting threshold amount is an inflation adjusted aggregate amount of gifts of $14,375 for tax years beginning in 2011. For gifts made in 2012, the reporting threshold is $14,723.
In general, the person giving the gift is the one who pays the tax, not the one receiving it. In any event, because IRS penalties for matters dealing with foreign transactions can be extremely high, i suggest you tell your friend to consult with a licensed tax attorney or CPA in your state before doing anything, just so he can be sure he's following the letter of the law.
03-22-2012, 02:05 PM
#4
Registered User
Join Date: Nov 2004
Posts: 354
Likes: 0
Received 0 Likes
on
0 Posts
the amounts are un taxable if you recieve gift from a NON U.S citizen from overseas.. you just have to report that you received it on form 3520... you will not be taxed.. just have to let them know that you got it.. but i beleive the max is 100k... mite want to clarify that with your tax accountant..
IF in fact the person from overseas holes a U.S citizenship, then yes, they will need to pay tax.. depending on amount..
IF in fact the person from overseas holes a U.S citizenship, then yes, they will need to pay tax.. depending on amount..
Thread
Thread Starter
Forum
Replies
Last Post