Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

My foreign father-in-law in Hong Kong like to give $1 million

for our family of four...
My foreign father-in-law in Hong Kong like to give $1 million for our family of four due to his failing health. Do we need to pay tax on the gift? or does my father-in-law need to pay tax on the gift? We have two small children. What is the best way to avoid paying or minimize tax?
Show More
Show Less
Ask Your Own Tax Question
Answered in 5 minutes by:
9/1/2012
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,129
Experience: Taxes, Immigration, Labor Relations
Verified
Hi and welcome to Just Answer!

 

There will not be any income or gift taxes.

You do not report the gift on your income tax return.

 

As a recipient of a gift - the person does not need to claim it as income. Regardless of the value. Please see for reference IRS publication 525 page 34 (left column)- http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. Generally, 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. If property is given to a trust and the income from it is paid, credited, or distributed to you, that income is also taxable to you. If the gift, bequest, or inheritance is the income from the property, that income is taxable to you.

graphic

 

The donor (the person who makes a gift) who is an US citizen may be required to file a gift tax return if the value of the gift is above $13,000 per person per year.

If the value of the gift is less than $13,000 per person per year - there is no tax consequences for the donor.

That would be the donor who files form 706 - not recipients of the gift.

Refer to Form 709 , 709 Instructions.
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 - your father-in-law is not under US jurisdiction and is not required to file the US gift tax return.

 

In additional - the large gift from non-resident aliens above is reported on the form 3520 - http://www.irs.gov/pub/irs-pdf/f3520.pdf - see part IV.

There is no tax associated with this reporting.

 

Please feel free if you need any help.

Be sure to ask if any clarification needed.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,129
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 5 years ago

What if my father-in-law has a U.S. green card?

if your father-in-law has a U.S. green card - he is classified as a resident alien - and will need to file a gift tax return form 706.
All gifts that are above $13,000 per person per year would be considered as taxable gifts.
However - there will not be any gift taxes unless the lifetime limit of $5,000,000 (adjusted every year for inflation) is reached.
Still - there is no taxes for you regardless of the gift value.
Ask Your Own Tax Question
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,129
30,129 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
How much is UK Corporation Tax on foreign dividends received
Hi Tony,How much is UK Corporation Tax on foreign dividends received from Honk Kong subsidiary?The recipient of such dividends is UK based Limited company. Are these foreign dividends exempt for a "sm… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,444 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Does a non-resident alien need to file a tax return on
Does a non-resident alien need to file a tax return on interest income received from a US business loan?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Information on Gift tax return. My 100 year old mother wants
my 100 year old mother wants to gift the balance of a home loan to my brother, Balance is aprrox $35,000. What are the mechanics? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,444 satisfied customers
For the purpose of IRS form 3520 line 54 can an estate
For the purpose of IRS form 3520 line 54 can an estate account be a person 'related to' my brother? For example, if I received money from an estate account from my father in Canada as part of a will a… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Help with Form 3520. Form 3520 - Need to know what line
Form 3520 - Need to know what line items to fill for having received a cash gift from a foreign citizen … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,444 satisfied customers
Form 3520- Received a bequest from a foreign Estate. Besides
Form 3520- Received a bequest from a foreign Estate. Besides my personal info, what other info, if any, goes on page 1 … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
How to report the sale of a property outside US? How to
How to report the sale of a property outside US? How to claim the taxes paid abroad on the profit made by selling property overseas?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Would it be correct to report a foreign cash inheritance as
would it be correct to report a foreign cash inheritance as an initial and final on form 3520? bequest, no trust, will require FBAR now and for some years but the 3520 is mny concern … read more
abci168
abci168
Principal
27 satisfied customers
What tax form is filed to report dividends paid by US Corp?
What tax form is filed to report dividends paid by a US Corp which is owned by a Canadian Corp? I think it might be 1042S. I want to know the rate of WH.… read more
abci168
abci168
Principal
27 satisfied customers
I was unaware of requirement to file Form 3520. I received
Hello:I was unaware of requirement to file Form 3520. I received cash gifts from foreign persons (parents) in 2016. I have not been contacted by IRS; have no previous under or unreported tax liabiliti… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
On a Partnership K-1, foreign income items are reported on
On a Partnership K-1, foreign income items are reported on Line 16, but in addition there is a separate schedule listing foreign currency gain, Subpart F income and qualified fund income under Sec 129… read more
abci168
abci168
Principal
27 satisfied customers
Same question on the taxation of interest and dividends (on
Same question on the taxation of interest and dividends (on mutual funds) earned inside a disclaimed portion trust ... disclaimer trust . The original owner of a trust passed and the spouse declined a… read more
Lev
Lev
Tax Advisor
30,129 satisfied customers
My question involves immigration law and tax law. Foreigner
My question involves immigration law and tax law.Foreigner comes to USA, becomes permanent resident. Had assets from before. I was told if you bring up to 100k USD per year to the USA, IRS doesn't min… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Is not knowing you need to file a form 3520 for foreign
Is not knowing you need to file a form 3520 for foreign gifts enough to establish reasonable cause? Plan to voluntarily disclose after finding out the requirement. I did my taxes myself on Turbo Tax, … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,214 satisfied customers
Form 3520. I received a cash inheritance from my mother who
Form 3520. I received a cash inheritance from my mother who lived in Canada. I will fill out 3520 general section and part IV line 54. Couple of questions. … read more
TaxWhisperer
TaxWhisperer
Principal
Master's Degree
24 satisfied customers
Question about the tax form 3520: I'm a legal alien and my
Question about the tax form 3520: I'm a legal alien and my mother died years ago in Europe. She had a house and my brother leaved in it. He is going to sell it in a couple of weeks and part of the mon… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I've prepared gift tax returns for my mom's trust for three
I've prepared gift tax returns for my mom's trust for three years. I've shown 100% of all funds put into the trust in the year funded. All gifts have been in cash and are immediately available for dis… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x