Taxpayer received a gift from a non-resident of the US in a foreign country. Is there any reporting requirement?
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Generally inheritences are not taxable, but some that are usually has to do with tax sheltered issues. To my knowledge this has no effect on US taxes unless your client has been informed otherwise. If it was my client I would ignore it for tax return issues.
Your client should keep all records that came with the check in case a question ever came up as to the source of the funds, especially if your client is self employed.This post is for discussion purposes only and should be verified with other sources before actual use.
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Not income tax
There is something. I had a client whose daugther and husband received a couple hundred thousand from in-laws over seas. I said I do not handle such things. I later was told they had to file "foreign gift" forms and pay some money. Wish I could remember more, but i have never worked with the kids.Comment
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Bob
You said foreign inheritance but what if if it just a gift? I have a client from a foreign land and some relatives want to give him a gift so he can buy a home in the US. Is there any taxes due on this money? I looked up foreign gift tax and did not find anything on this particular subject.
SupermanComment
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Sorry about misreading you post, but gifts and inheritences have the same outcome. The issue of a foreign gift tax return is possible but usually the grantor files gift tax returns...???Originally posted by superman View PostThis post is for discussion purposes only and should be verified with other sources before actual use.
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Gift tax return
So are you saying that if the grantor is a foreign citzen not under US law than there is no tax implactions for the reciever?
SupermanComment
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There would be no US tax. The country where the gift came from may want a gift tax return to be filed by the grantor. The grantor may have given the gift to the US citizen and expects the US Citizen to pay their taxes to the foreign country for them, unlikely as that seems.Originally posted by superman View PostThis post is for discussion purposes only and should be verified with other sources before actual use.
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The receipt here would be screwed if that foreign country has a 200% gift tax.Originally posted by BOB W View Post
Oh, you receive $100,000 gift this week. Enjoy it..... but please remember to write a $200,000 check for the tax next week...Last edited by Questionguy101; 03-16-2010, 09:15 PM.Comment
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I would look at Form 3520. I believe if the gift is $100,000 or more the form must be filed.Originally posted by superman View PostComment
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I quickly reviewed the form and all it is is a notification of receipt of a gift. This form is more for intelligence purposes. I saw no computation for any tax in the USA. And yes it is filled out for gifts for $100,000 or more.Originally posted by New York Enrolled Agent View PostThis post is for discussion purposes only and should be verified with other sources before actual use.
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There is a form
and the mother-in-law says the husband's parents paid the tax to DC - the gift was $300,000. She did not see anything she is just passing on what her daughter told her.
No great tax source. I was glad I said it was not in my field.Comment
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I don't know if this is a cash gift or not. I believe any money transfer from a foreign country of $10,000 or more needs to be reported. Don't know the form. Or do I mix this up with the $10,000 reporting requirement for foreign bank accounts?
"To bring money or other monetary instruments into US, if the amount exceed $10,000, you will need to report it to CBP."
This is part of a response I found on the Internet. I have no idea who CBP is.Comment
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