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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55605
Experience:  29 years of experience as a tax, real estate, and business attorney.
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I have a question about buying a home, and an international

Customer Question

I have a question about buying a home, and an international wire transfer coming as the down payment. The purchase price of the home is $480,000, and it has a casita. My in-*laws will be sending a wire transfer of $260,000 as a gift toward the home as a down payment. Will we have any tax implications? Since the money is not being wired to our account, but instead directly to the loan, would I have to fill out a 3520 form at the end of the year?
Second scenario, if they send $195,000 to the bank as a gift toward the house, and $65,000 to us as a gift, would that change the tax implications, or the 3520 at all?
Submitted: 2 years ago.
Category: Tax
Expert:  Richard replied 2 years ago.
There will be no tax implications to you. Recipients of gifts in the U.S. incur no gift tax consequences. And, since it's a gift, it's not income and thus not taxable or reportable. The only thing that is necessary is for you to file Form 3520 with the IRS because the amount is in excess of $100,000 in any calendar year. This is simply a reporting requirement established as part of the Homeland Security Act. As I mentioned, it's simply to report the transfer of funds from outside the U.S., but no tax is due. Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). I thank you in advance for taking the time to provide me a positive rating!
Expert:  Richard replied 2 years ago.
The structure alternatives would not change things because either way the transfers would be considered a gift to you and also in excess of the $100,000 limit.