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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28935
Experience:  Taxes, Immigration, Labor Relations
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My parents are going to wire transfer $80000 to the U.S.

Customer Question

Hello,
My parents are going to wire transfer $80000 to the U.S. from China. My father is the U.S. citizen and my mother is the green card holder. That amount of money is a gift from my grandparents. Each of my grandparents are going to wire transfer $40000 to my father and mother's account. I want to ask do my parents need to file foreign gift tax this year? what is the amount limit for not filing foreign gift tax? Looking forward to your answer. thank you.
Sinerely,
Jenny
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Hi and welcome to our site!

In the US - gift - is not taxable income for the recipient and you do not need to report it on the tax return.

There is no any amount limit.It does't matter how the gift is transferred - as long as that is a gift - there is NO income tax liability.

Please see for reference IRS publication 525 -

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. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you..

.

Another issue with gift tax...

Regarding your situation - if the donor (gifter) is an US person - the gift is reported on the gift tax return. The gift below $14,000 is not taxable gift but when the gift is above that threshold - it is reported on the gift tax return - form 709.Regardless - there will NOT be any gift tax liability as long as the lifetime limit is reached - that limit is $5,430,000 for 2015.
.

If the donor is NOT an US person - and is a nonresident alien - the donor is not under US jurisdiction and does not need to report the gift.

However if you receive above $100,000 from a nonresident alien and if the total amount is above $100,000 - such gift is reported by the recipient on form 3520 -

http://www.irs.gov/pub/irs-pdf/f3520.pdf

So far - based on your information - donors are your grandparents who are nonresident aliens and the total gift amount is below $100k - so there will not be any tax liability and NO reporting requirements.

Any questions?

Expert:  Lane replied 1 year ago.

.

Expert:  Lev replied 1 year ago.

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