Here are my questions:
- Would these transactions cause any issues with the IRS? I know I would have to report them, of course.
Since the IRS taxes individuals, not families, receiving money is not a reportable event. However, once you have the money, you will be liable for any income it generates.
- I will be receiving more than $16k this year, so I cannot claim the rest of the transfers as gifts. What would be my best strategy in receiving this money?
That is not quite true. There is something called the unified gift tax. However, this is true when you gift money to others, not when you receive it. It sounds like your family are not US citizens or residents, so they would not be subject to this tax, but rather the taxes in Russia, or maybe the place where they currently pay tax on the money if it is subject to another taxing authority, like perhaps the European Union. Again however, once you receive the money as a US resident you would be subject to gift transfer rules as the legal owner of the money.
- Would it be better to create a trust instead to have the money transferred? Please share your recommendations.
No. Trusts are either taxed at the individual owner's rate or a higher rate depending on the kind of trust it is. This will not save you taxes. If you create a trust, it would usually be for other reasons.
And I'm sorry your family is suffering in the midst of this global tragedy.
