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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22654
Experience:  Taxes, Immigration, Labor Relations
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Hello, I live in Florida and just received a wired transfer from Thail

Resolved Question:

Hello,
I live in Florida and just received a wired transfer from Thailand for $15000. If I transfer this amount back to my brother in Thailand, do I still need to report this amount to IRS? Also, if I transfer this amount to my sister here in Florida, do I still need to report this amount to IRS or is there a tax consequences. My husband concerned that because we received this wired transfer, we will get put to a higher tax bracket for our income tax. If you need more info please let me know.

Thank you for your help.
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

Lev :

Hi and welcome to our site!
The fact of transferring the money is not a taxable event by itself - and is not reported on your tax return. That's it.
Neither the transfer from Thailand to your account nor the transfer from your account are not taxable and not reportable.
However - to determine if that amount is taxable or not - we need to examine the reason of such transfer.

Lev :

So - if that is a loan - it is not taxable,
If that is a gift or inheritance - it is not taxable either.

Lev :

If that is a payment for services - that amount is included into gross income - but you might be able to deduct some qualified business expenses.

Lev :

If that is a payment for the property which you sold - the sale transaction might need to be reported - but only the gain will be included into taxable income.

Lev :

So - for proper determination of possible tax consequences - we need to know the reason and the purpose of that transfer - not just the fact of the transfer.

Customer: hello, the wired transfer is inheritance money that my brother sent me for my share and he supposed to be wired 2 more time for equal amount of 15k and thats why I'm concerned about the tax consequences at the end of the year. I heard that the bank will report to IRS if there is a wired transaction of 10k or more. but in my situation from what you explained earlier, inheritance money will not be taxes?
Expert:  Lev replied 9 months ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

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If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Lev replied 9 months ago.

Several issues...

1.
As a recipient of inheritance - you do not need to claim it as income. Regardless of the value.

Please see for reference IRS publication 525 page 31 left column -http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income.

2.
The fact of receiving inheritance 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 - but it is filed separately. There is no tax associated with that form.

3.

The fact of transferring the money is not taxable and is not reportable to the IRS - I already mentioned that above - so nothing to worry.

4.

The bank does report transactions of $10,000 or more - but only cash transactions - not transfers. Here is the reporting form - http://www.fincen.gov/forms/files/fin8300_cashover10k.pdf
You may review for your reference - but based on your information - that should not be your concern.
5.

Your bank is required to file a Suspicious Activity Reports (SAR) with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury - to report known or suspected criminal offenses, at specified thresholds, or transactions over $5,000 that they suspect involve money laundering or violate the Bank Secrecy Act.

To prevent possible reporting and if you think that your transfer might look suspicious - I suggest to contact your banker - and provide all information about the source of your funds.

 

So far - your worries seem as overreaction - and there is NO any additional tax liability.

But still you might want to contact your bank and inform them about your transaction.

Customer: replied 9 months ago.


Hello and thanks again for clarification on wired transfer and taxes.


So, if I want to wire the same amount back to bank in Thailand, do I still need to fill out the 3520 form or report this amount to IRS? Also, if I choose to wire that money to my brother bank here in the US, do I also need to worry about tax or file a different form with IRS? Thank you for your help in clarifying this matter.

Expert:  Lev replied 9 months ago.
So, if I want to wire the same amount back to bank in Thailand, do I still need to fill out the 3520 form or report this amount to IRS?
The form 3520 is to report the fact of receiving inheritance from a nonresident alien. As I mentioned above - there is NO tax liability associated with that reporting.
If you received inheritance - it must be reported - regardless if the money were transferred to the US or not.
The fact of transferring the money is not reported.
However - if that is YOUR account in a foreign country - that fact of having a foreign account should be separately reported on FBAR form.

Also, if I choose to wire that money to my brother bank here in the US, do I also need to worry about tax or file a different form with IRS?
The fact of transferring the money is NOT reported. If these are YOUR money - you may transfer them to any person in the US or to a foreign country.
However - if you want to GIFT that amount - there will be a different transaction - and the gift above $14,000 per person per year is subject of a different reporting.
Customer: replied 9 months ago.


This is the first time that I have to deal with wired transfer from other country so my husband is a bit concern about income tax consequences but thank you for clarifying that for me.


The reason that I have to wire it back to thailand again is because my brother has to pay for the lawyer expenses there but for some reason they can't just wire the money directly toThai bank account that belongs to my brother since I do not have Thai bank account there. It was a long story and it seems to be a bit complicated than it should be because it involved lawsuit in thailand to retrieve my share of inheritance that my brother overhere working with the lawyer there on my behalf.


Anyway, to sum up my question for this reply, it seems that it would be better for me to wire money back to my brother's thai bank account instead of wire it to my brother account in US. The bank also not allowed me to wire money that over 10k to other account here in US possibly for tax related. I just try to avoid any complications in transferring money from place to place unnecessary. Any clarifications on this one would be greatly appreciated. Thanks again.

Expert:  Lev replied 9 months ago.

This is the first time that I have to deal with wired transfer from other country so my husband is a bit concern about income tax consequences but thank you for clarifying that for me.
There is NO tax liability resulted from the fact of wire transfer. That is not reported on your tax return, However if you worry that the transfer might look suspicious - you may want to contact your bank and inform them about details.

.

The reason that I have to wire it back to Thailand again is because my brother has to pay for the lawyer expenses there but for some reason they can't just wire the money directly to Thai bank account that belongs to my brother since I do not have Thai bank account there. It was a long story and it seems to be a bit complicated than it should be because it involved lawsuit in Thailand to retrieve my share of inheritance that my brother over-there working with the lawyer there on my behalf.
That understandable and explains your situation - so that is not a GIFT - and you do not need to worry about reporting the gift. Based on your explanation - your brother is acting as your agent - and the money you will wire to him are intended to pay your portion of legal expenses in Thailand.
There is nothing to worry - and as long as you personally do not have a foreign account - nothing for you to report.

Anyway, to sum up my question for this reply, it seems that it would be better for me to wire money back to my brother's Thai bank account instead of wire it to my brother account in US.
Actually - there is MO difference. Neither transfer is reported to the IRS and neither affect your tax liability. You may use YOUR money as you wish and the way which is more convenient for you. No limitations.

.

The bank also not allowed me to wire money that over 10k to other account here in US possibly for tax related.
That is not tax related but based on internal bank policy. Instead of wiring - you may simply write a check - and your brother may deposit that check into his account either in the US or abroad.
There is NO any tax liability with either way.

Customer: replied 9 months ago.


The problem with check is it's taking too long for it to clear but if no issue with electronic transferring that money to his bank account in US then I can probably make a transfer twice since the bank only allows 10k at a time. Do you know if my brother has to report the amount he received from me to IRS or fill out certain form? Thank you.

Expert:  Lev replied 9 months ago.

Do you know if my brother has to report the amount he received from me to IRS or fill out certain form?

Based on your explanation - your brother is acting as your agent - and the money you will wire to him are intended to pay your portion of legal expenses.
Thus - your brother will not have an ownership toward that amount.
Your brother is not required to report the fact of transfer to the IRS regardless if that amount is transferred to his US account or to his account abroad.
However - regardless of this specific transfer - he might need to report the fact of having a bank account abroad - if the total value on that account is above $10,000 - that is referred as FBAR reporting - I hope he is aware of FBAR requirements - but you may verify with him.

Please take a moment to rate my answer - so I would be credited for the work done.

My goal is to provide EXCELLENT service - and you are welcome for any additional questions now or later.

Please be sure to come back for all your tax related issues.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22654
Experience: Taxes, Immigration, Labor Relations
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