Oversea remittance

[Questionguy101]

A client received an oversea remittance last year. The sum is more than $100,000. He said his relative sent him this sum of money so he can help that relative to buy a property in the US. The property will be under his name when it is purchased but eventually he will give the property back to the relative.

He asked about the filing requirement for it. I thought about Form 3520. But it is not really a gift because the property will be returned to the relative eventually. So other than Form 3520, is there any other filing requirement under such a situation?

[Lion]

What is it?

If it's not a gift, what is it? Income, loan? Is your client paying interest? And, when he gives the house to his relative will he be filing a gift tax return? Or, selling it, or...? Did they execute any paperwork? Hope there's not a huge family feud before all the transactions are completed!

[Questionguy101]

If it's not a gift, what is it? Income, loan? Is your client paying interest? And, when he gives the house to his relative will he be filing a gift tax return? Or, selling it, or...? Did they execute any paperwork? Hope there's not a huge family feud before all the transactions are completed!

I agree he will have to think hard on your questions too. But just to address his question now, if it is not a gift, is there any other filing requirement to report the remittance?

[appelman]

I would say not.

However, your client may get some correspondence from the IRS asking him to explain just what the transfer is, along the lines of some of Lion's questions. Filing Form 3520 and reporting it as a gift would likely lead to complications when returning the property to the overseas relative.