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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15743
Experience:  15years with H & R Block. Divisional leader, Instructor
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My question involves immigration law and tax law. Foreigner

Customer Question

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 mind and won't tax it.
Is that true? I know one should report capital gains from everywhere, but if there were no gains and you are just tranfering value. Does that mean a millionaire should transfer 99k per year from other country, for instance?Is it the same if the asset is an apartment you sell or bitcoins?
Submitted: 2 months ago.
Category: Tax
Expert:  KJLLAW replied 2 months ago.
You only pay US taxes on income earned in the US, not money or earnings from bank accounts or profits earned in another country before your green card.Money earned overseas prior to your green card is not taxed by the US. You can bring up to 10'000 USD in cash and declare at the POE (ex. 9'999) and you still don't have to pay taxes. You still have to declare it.However, if you have had a bank account in another country with more than $10,000 in that account you should have filed a TD F 90-22.1 which is to be filed by June 15 of each year.The rule is if it is money, assets, or even property held in another country prior to your green card you are only taxed by your home country.I hope this clarifies. Please don't forget to rate the question with stars so that I will receive credit and payment for assisting you with your question.
Expert:  KJLLAW replied 2 months ago.
If you have any other questions please just ask
Customer: replied 2 months ago.
I was told I can send up to 100.000 USD per year to the US from foreign assets with no capital gain and still not declare, is that true?What happens if I fail to declare one year and then declare the other year? does the US assume I just earned all of it?
Expert:  Robin D. replied 2 months ago.

Hello

Your question is US tax question so it has been moved to tax now.

"I was told I can send up to 100.000 USD per year to the US from foreign assets with no capital gain and still not declare, is that true?"

The moving of your own money to the US is not a taxable event. The tax law you are referring to is under reporting for gifts made to you from a foreign person. A non US person can give you up to $100,000 in a tax year and you do not have to report the gift (if you are a US person) but if you receive gifts of $100,000 or more you must report using form 3520. This is not a tax calculating form just a reporting form. AND the funds were never your funds previously they are gifts to you.

A US person also is required to report their foreign accounts. That is under FATCA ( Foreign Account Tax Compliance Act ).

FATCA requires certain U.S. taxpayers who hold foreign financial assets with an aggregate value of more than the reporting threshold (at least $50,000) to report information about those assets on Form 8938, which must be attached to the taxpayer’s annual income tax return.

You may have to complete and file other reports about foreign assets, such as FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) (formerly TD F 90-22.1), in addition to Form 8938.

If you expect to be moving $100,000 each year form your own account abroad the you are surely required to report the account that holds it on form 8938 and FINCEN 114. No tax except on any interest you are earning. The interest is still taxable even if the funds you earned prior to coming to the US are not.

You are most welcome.
A positive 5 star rating is appreciated so I am credited for assisting.

Customer: replied 2 months ago.
Thanks that was a great response to the first part of the question.I had also asked about what happens if I forget to declare.
I guess I have in mind a complicated case.
So me and wife jointly declared, but she accidentaly did so, so she didn't put my side of things, and definitely not the abroad property. Then now we are finishing friendly divorce. Then next year or the other one I'll have to declare when I'm bringing property into the country, and they'll say "why didn't you declare this the first time?" and the truth is "I had no idea I had to do any of that, I suck at forms and taxes, my wife isn't great either" well, ex wife by then.
In any event. Will they just say "well if you had not declared prior, and now you are, then it is capital gains. Give us tax?What if the property doesn't have clear owner. Say it belongs to my family, so I can spin it as my dads or mine or my mums.
Then the smart thing to do is to wait, and then say it was a gift from dad or mum, and always keep it at 99kUSD per year, right?
Expert:  Robin D. replied 2 months ago.

Will they just say "well if you had not declared prior, and now you are, then it is capital gains. Give us tax?

No, it does not work like that for accounts abroad.

Failure to report foreign financial assets on Form 8938 will result in a penalty of $10,000 (and a penalty up to $50,000 for continued failure after IRS notification) and a 40 percent penalty on an understatement of tax attributable to non-disclosed assets.

If you have not disclosed then you need to correct that by filing the forms now.

There is no difference if your name is ***** ***** account as an owner. If you filed a joint return then your ex spouse and you would need to amend the return to also report any interest as income.

You are most welcome.
A positive 5 star rating is appreciated so I am credited for assisting.