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Hi and welcome to Just Answer!There is no legal limitations for gifts.
As a recipient of a gift - neither you nor your spouse do not need to claim it as income. Regardless of the value of the gift. Please see for reference IRS publication 525 page 31 left column - http://www.irs.gov/pub/irs-pdf/p525.pdf
.The fact of receiving the gift from a nonresident alien is separately reported on form 3520.-http://www.irs.gov/pub/irs-pdf/f3520.pdf. In general, Form 3520 is due on the date that your income tax return is due, including extensions. There is no tax associated with that form. Only gifts above $100,000 are reported.
Since the gift in your situation is below reporting requirements threshold - no need to file form 3520.
The donor (the person who makes a gift) who is an US person or if the gift is suitable in the US - may be required to file a gift tax return if the value of the gift is above $14,000 per person per year (for 2013). If the value of the gift is less than $14,000 per person per year - there is no tax consequences for the donor. That would be the donor who files form 709 - not recipients of the gift. There will not be any gift taxes unless the lifetime limit of $5,000,000 (adjusted every year for inflation) is reached.
However considering your situation - because the donor is not US citizen nor a resident of the US nor the property is located in the US - foreign parents are not under US jurisdiction and are not required to file the US gift tax return.
My tax preparer just came back from China and has jet lag, but she wanted the transfer of funds to be by wire instead of by check. We have the check and lodged it. (We did not have the ability to get my wife's elderly parents to send a wire - they wanted to send a check)
I think you are saying we should do nothing except to file form 3520. Is this clear cut and no further research required?
Transfer by the check or by wire would make no difference. Since the amount is below $100,000 - the form, 3520 is not required.
Thank you. That is it for now