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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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My future relative wants to give me $100,000 as a gift. Im

Resolved Question:

My future relative wants to give me $100,000 as a gift. I'm a US citizen and he is not. Do either of us have to report this transaction to the IRS?
Submitted: 7 years ago.
Category: Tax
Expert:  Ed Johnson replied 7 years ago.



thank you for your question.


IRS. IRC Sec. 6039F requires that such gifts be reported on Form 3520, if it is received from overseas. (gifts of 100,000 or more)


This is a change in the law that also requires gifts from foreign individuals of as little as 10,000 dollars to be reported to the IRS on the same form.


As long as this gift was received form a foreign indivual it is supposed to be reported.


The penalty for not reporting is: (from the U.S. treasur site) such United States person shall pay (upon notice and demand by the Secretary and in the same manner as tax) an amount equal to 5 percent of the amount of such foreign gift for each month for which the failure continues (not to exceed 25 percent of such amount in the aggregate).


The reporting of the gift is for security reasons not tax purposes, realted to money laundering and homeland security.



Customer: replied 7 years ago.
So I only need to report the receipt of the gift for reasons you described and not pay any taxes? Thanks
Expert:  Ed Johnson replied 7 years ago.

That is correct. As long as you meet the reporting requirement, you pay no taxes on it.



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