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What are the tax implications of receiving a cash gift (via

wire transfer) from my non-US...
What are the tax implications of receiving a cash gift (via wire transfer) from my non-US citizen step-father-in-law who lives outside the U.S.? I am told by him that it is tax-free but I just have to record it someplace on my own return. This seems contrary to some other answers I've seen out here to similar questions. I think I do not have to report it but don't want to get dinged if ever we are audited. Thank you!
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Answered in 10 minutes by:
1/3/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and thank you for using JustAnswer.com. You are correct - you do not have to record the inheritance anywhere on your tax return. This is not taxable income to you. If your step father was inside the US then he'd have to file a gift tax return if he gave you more than $14,000 - but since he's outside the US he has no reporting requirement. You can CLICK HERE to read more.

Please let me know if you need anything additional. Thanks for using Justanswer.com and have a happy and safe 2013.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

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Customer reply replied 4 years ago

Thank you for the quick answer and the link, which actually has led me to have to ask a follow-up question. You mention he has no reporting requirement but that might just have been a typo since my question was about my own reporting requirement, however when reading through the link I found myself on the Instructions for Form 3520. The gift I received, while not related to a foreign trust, was more than $100,000. The instructions on Form 3520 are "and" instructions, not "or" instructions, regarding who is required to file, so my three questions are: (1) Is a nonresident alien individual the same as simply a foreign citizen? If so, (2) does my gift then fall under section 4.a. of who is required to file (text says, "a. More than $100,000 from a nonresident alien individual or a foreign estate (including foreign persons related to that nonresident alien individual or foreign estate) that you treated as gifts or bequests;") and even if it does, (3) since I don't fall under the other three reporting requirements, does that "trump" the fourth one, since they are presented collectively as an "and" statement versus "or?" I feel like this Form 3520 might be what he was referring to so just want to be completely sure. Thank you.

Thank you for your follow up. Since the amount of the gift was over $100,000 you will have to fill out a form 3520 to report this to the IRS. However, this is not reported as taxable income to you.

So yes, a non resident alien is the same thing as a foreign citizen. Your stepfather is a foreign citizen, if he sent you over $100,000 you would need to file form 3520.

Don't worry about trying to figure out the instructions - you have to fill out this form.

Please let me know if you need anything additional.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site*
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
Megan C and 87 other Tax Specialists are ready to help you
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Megan C
Megan C
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