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Ask Robin D. Your Own Question

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7269
Experience:  15years with H & R Block. Divisional leader, Instructor
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When receiving money from someone outside the US, does the

Resolved Question:

When receiving money from someone outside the US, does the receiver pay the tax on the money or does the sender pay the tax
Submitted: 2 years ago.
Category: Tax
Expert:  Robin D. replied 2 years ago.

Robin D :

You are not required to pay tax on the gift and if your fiance is not a US citizen or resident they are not resposible for the Gift Tax on the Gift.
You will however need to file Form 3520. File Form 3520 separately from your income tax return. The due date for filing Form 3520 is the same as the due date for filing your annual income tax return, including extensions. You file an annual Form 3520 for all reportable foreign gifts and bequests you receive during the taxable year.

Customer:

So what I think you are saying is that there is NOTHING i am responsible to report outside of the Form 3520?

Customer:

Hello???

Robin D :

If he is not a US Citizen then that is exactly correct. He would have no gift tax reporting requirement to the US as a Nonresident and you as the reciever does not pay tax on a gift you receive. Do not forget to the report the gift though. There is a penalty for not reporting.

Customer:

Ok. So will he pay taxes on it in London?

Robin D :

If he is liable as a resident in UK

Customer:

If he is NOT a US citizen

Customer:

?

Robin D :

I can look up UK gift tax info

Customer:

If he is a US citizen but is working in the UK I assume tax has to be paid to someone?

Robin D :

If he is a US citizen then he must report the Gift using Form 709 with his tax return.

Robin D :

You do not file the 3520

Robin D :

He will report the amount over $13000 and this will lower his amount that can be excluded from his estate

Robin D :

So unless he gives more than $1mil (lifetime allowance) he will not pay tax but must report

Customer:

The total amount he has been paid since working there is 2,700,00.00

Robin D :

If this is not a gift to you then he should just have the money put oin an account for himself

Customer:

We are combining households in anticipation of our wedding in a few months

Customer:

However, he listed me as next of Kin... and as his wife.

Customer:

although I won't be for several more months

Robin D :

He will still need to report those earnings as aUS citizen and can exclude up to $91500 . You will not be his wife for gifts in the eyes of the iRS untill you are legally married.

Customer:

Okay...so how does that change things for me. He has listed me that way so does it change anything? I'm sensing your answer is "no" but want to clarify

Robin D :

No, it does not matter how he has you listed for the transfer. What matters for taxes is if this is going into your account.

Customer:

Okay ... spell it out for me. (slower among us. lol ) Since it is going into my account and I am listed as his wife on the transfer...but am not yet his wife. What is the botXXXXX XXXXXne regarding whether I will need to pay tax on the money. Thanks...

Robin D :

Well, if you get married before the end of the year then you are married for the entire year (in the IRS eyes). So if the money came to you and you were married by Dec 31 then I would interpret no Gift tax. You do not make gifts to your spouse. You would never pay tax on the goft, the giver pays any tax. You are not required to report anything. He (if you are not maaried by Dec 31) will file Form 709 and pay gift tax on anything over $1mil he gives to a nonspouse

Robin D :

This is not even an issue if he puts the money in his own account

Customer:

I wish he would, believe me, and he will allocate it between our accounts, cd and our children when he returns

Robin D :

Then if you are married by Dec 31st there is no reporting

Customer:

Thank you...

Customer:

Just a momebnt

Robin D :

You are welcome

Customer:

okay...I think that is all the questions I have

Customer:

Have a nice evening

Robin D :

DO not forget he is to file and pay on the income form abroad

Robin D :

from (sorry)

Customer:

I assume his employer has taken out the tax he needs to pay

Robin D :

Good

Robin D :

You have a nice life and best wishes

Customer:

I have another question

Robin D :

Ok

Customer:

what is the best way to set up our accounts so that it is all insured. Banks seem to have limits of 250,000.00

Customer:

I realize we can have a number of accounts... my name, his name and our names together

Customer:

However, if we place our chidren as beneficiaries

Customer:

how will that impact them

Customer:

1 son is 19 the other two are younger than 18

Robin D :

Good question. I think you will want to speak to a financial advisor on protecting your money but if you have your children as bene on accounts it has no bearing on taxes unless they inherit and then cash is not taxable wjen you inherit.

Robin D :

If the accounts are the type that earn income or retirement then they will be taxed just like the person they inherit it from would be taxed had they not passed

Customer:

ok... yes, we do have an appointment with a financial adviser next Friday.

Customer:

ok

Robin D :

Graet

Customer:

thank you for that

Robin D :

Great

Customer:

Now, I will really let you go... Good night

Robin D :

You are most welcome. You can always come back even after you click ACCEPT

Customer:

ok...thanks for that direction

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7269
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 5 other Tax Specialists are ready to help you

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