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Tax.appeal.168, Tax Accountant
Category: Tax
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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How much money My parents can wire transfer to me and my wife

Customer Question

How much money My parents can wire transfer to me and my wife in USA from INDIA to consider as a gift.
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.
Not sure what happened, but I need to retype my previous answer. Your parents can gift you how much they want. If your parents are not U.S. citizens, you will need to complete a Form 3520 if the amount of the gift is $100,000 or more. The form 3520 is an information form only. No tax will be due. SEE BELOW: Reporting RequirementsYou 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);orGifts valued at more than $13,258 (adjusted annually for inflation) from foreign corporations or foreign partnerships (including foreign persons related to the foreign corporations or foreign partnerships). You must aggregate gifts received from related parties. For example, if you receive $60,000 from nonresident alien A and $50,000 from nonresident alien B, and you know or have reason to know they are related, you must report the gifts because the total is more than $100,000. Report them in Part IV of Form 3520. Treat gifts from foreign trusts as trust distributions you report in Part III of Form 3520.File Form 3520 separately from your income tax return. The due date for filing Form 3520 is the same as the due date for filing your annual income tax return, including extensions. You file an annual Form 3520 for all reportable foreign gifts and bequests you receive during the taxable year. See the Instructions for Form 3520 for additional information. Under a new law effective June 17, 2008, gifts from individuals who ceased to be a U.S. citizens or green card holders (lawful permanent residents) on or after June 17, 2008 may be subject to special rules. Refer to the 2008 Instructions for Form 3520 for additional information.Where to File Form 3520Mail Form 3520 to the following address:Internal Revenue Service CenterP.O. Box 409101Ogden, Utah 84409Penalties for Failure to File Form 3520You may be penalized if you do not file your Form 3520 on time or if it is incomplete or inaccurate. Generally, the penalty is 5% of the amount of the foreign gift for each month for which the failure to report continues (not to exceed a total of 25%). REFERENCE SOURCE: Link to Form 3520/instructions:
Customer: replied 2 years ago.
What if the gift amount is less than 13000 $ for me and 13000 for my wife (total 26000$ ). Do I still need to report this gift amount while tax return.
Expert:  Tax.appeal.168 replied 2 years ago.
The current gift tax exclusion is $14,000 per person annually. You will not have to complete a gift tax return. If a gift tax return is required to be completed, the donor is the person who completes the gift tax return, not the donee. If your parents are not U.S. citizens or Green Card holders, the gift tax exclusion amount does not apply to them. The gift tax laws apply to U.S. citizens, not foreign citizens.
Customer: replied 2 years ago.
So I dont have to worry about any tax issues if my parents ( Indian Citizen) send me 13000$ annually from India. If they just wire transfer 13000$ amount into Bank account in America, I don't have to report to anyone.
Expert:  Tax.appeal.168 replied 2 years ago.
That is correct. As your parents are not U.S. citizens, they can send you up to $100,000 a year if they wanted to and you would not have to do anything regarding reporting the funds to the IRS. Keep in mind the currency exchange rate when the money is wired to you. This will affect the actual $$ amount. Another thing is that banks have their own reporting requirements. Normally, as it is traceable, wired amounts are not reported to the IRS, however, it depends on the bank. Either way, whether the bank reports the wire transfer or not, the wired amount is not taxable to you.