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One of my father's friend is sending me money from India as…

One of my father's friend...
One of my father's friend is sending me money from India as a gift, I'm not totally sure if it is going to be from a personal account or a business account. I'm a Indian National and I've been working here in US on H1B visa for past 4 years. The gift amount is going to be less than $100000. Are there any implications or tax I have to pay for the gift amount?
More specifically, does it matter if the incoming wire is a business account?
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Answered in 5 minutes by:
3/12/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,755
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello!

My name is***** will assist you today.

Please give me one moment while I review your question and type my initial response

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There are no tax implications for receiving a gift from a foreign person.

If the amount becomes $100,000 or more you will have a reporting requirement for informational purposes only to the IRS. You will use IRS From 3520.

____

I have placed a link below to IRS.Gov along with a relevant excerpt for your convenience.

https://www.irs.gov/businesses/gifts-from-foreign-person

General Rule: Foreign Gifts
In general, a foreign gift is money or other property received by a U.S. person from a foreign person that the recipient treats as a gift or bequest and excludes from gross income. A “foreign person” is a nonresident alien individual or foreign corporation, partnership or estate.

Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

Thank you!

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Customer reply replied 5 months ago
Reporting Requirements
You must file Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, if, during the current tax year, you treat the receipt of money or other property above certain amounts as a foreign gift or bequest. Include on Form 3520:Gifts or bequests valued at more than $100,000 from a nonresident alien individual or foreign estate (including foreign persons related to that nonresident alien individual or foreign estate);
or
Gifts valued at more than $15,601 for 2015 (adjusted annually for inflation) from foreign corporations or foreign partnerships (including foreign persons related to the foreign corporations or foreign partnerships).Is the second clause of $15,601 valid only for the year of 2015? Can you elaborate that?

Yes, the second clause is if you are receiving the funds from a foreign business such as a corporation or partnership

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The gift would still not be taxable, but would be reported if over $15,601 from a corporation or partnership.

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For 2017 the amount is $15,797

"More than $15,797 from foreign corporations or foreign partnerships (including foreign persons related to such foreign corporations or foreign partnerships) that you treated as gifts."

Below is a link to the instruction for for Form 3520

https://www.irs.gov/pub/irs-pdf/i3520.pdf

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Customer reply replied 5 months ago
Thanks. Foreign person, foreign corporations or foreign partnerships do not have to be related to me in any way for the money to be considered as a gift right?

Correct, you do not need to be related to the person or entity to receive a non taxable gift.

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,755
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified
Chad EA, CDFA®, CFP® and 87 other Capital Gains and Losses Specialists are ready to help you
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Customer reply replied 5 months ago
Thank you so much for all the information

Thank you for the rating.

Please let me know if you have additional questions

Have a great day.

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