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Tax.appeal.168
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My parents are foreigners. They want to transefer money(more

Customer Question

Hello! My parents are foreigners. They want to transefer money(more than 30000$) from overseas to their bank account in US, then gift the money to me. I wonder I shall file form 3520 or form 709 for the tax return? As the donator are foreigners, do I need to pay gift tax for them?Thank you very much!
JA: What state are you in? It matters because laws vary by location.
Customer: CA
JA: Has anything been filed or reported?
Customer: Not yet
JA: Anything else you want the lawyer to know before I connect you?
Customer: My parents have never been to U.S .
Submitted: 1 month ago.
Category: Tax
Expert:  Tax.appeal.168 replied 1 month ago.

Hello. Thank you for choosing this Q&A service for assistance. My name is Angela. I will be assisting you.

As the amount of the gift will be more than $100,000, you are required to file the Form 3520. As for the Form 709, that form is required to be filed when a U.S. person gifts another U.S. person more than $14,000 annually. SEE BELOW:

Reporting Requirements
You 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);

or

  • Gifts valued at more than $15,601 for 2015 (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.

REFERENCE SOURCE:

https://www.irs.gov/businesses/gifts-from-foreign-person

I don't know what country your parents are in or what the gifting rules are there, but here in the U.S. you will not have to pay gift tax for them.

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