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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28298
Experience:  Taxes, Immigration, Labor Relations
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I live in California. My parents sold a house oversea and

Customer Question

Hi,
I live in California. My parents sold a house oversea and transferred the amount to my bank account . Do I have to pay any tax on it? or Do I have to report IRS?
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Before processing with the complete answer we need some clarification...

- are your parents US persons or they are nonresident aliens?
- what is the purposes of transferring the money top you? is that a gift? a loan? other?

Customer: replied 1 year ago.
My parents are US persons. And they are low income.
It is their gift to me. We couldn't transfer the whole amount at one time. Since the government there only allows certain % each year. So, we have to use a private money transfer instead of the government bank. and it's about 700k
Expert:  Lev replied 1 year ago.

If your parents sold the property - they will report that sale transaction on their income tax return.

That is regardless if the property is in the US or abroad.

They will calculate the gain or loss as

(selling price) MINUS (adjusted basis).

The basis is the original purchase price if the property was purchased.

However - if the property was inherited - the basis is determined as the fair market value (FMV) at the time the decedent passed away.

That basis is adjusted by improvements and some other expenses.

The gain is added to their taxable income - but if the property was owned more than a year - it will be taxed at reduced long term capital gain rates.

.

For yourself - the gift is not taxable income - and you do not need to report it on your tax return.

However - your parents as donors will need to file a gift tax return (form 709) - but most likely - there will not be any gift taxes.

The fact of transferring the money is not reportable.

However - if your parents hold a foreign bank account - that is subject to reporting.

Any questions?

Expert:  Lev replied 1 year ago.

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If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.