IRS Form 3520

[ThurstonX]

Greetings.

I've read a few posts re: filing a 3520 with the IRS, and while informative, they do not address my specific situation.

My wife is a naturalized US citizen.  She and her brother inherited their father's house in their home country.  After more than a year, they finally sold it, but the buyer is in the US.  I'm sure of his status in the US (resident or citizen).  My wife's brother still lives in their home country and, being a lawyer, handled the contract.  The buyer wired from his US bank to our joint account my wife's half of the proceeds from the sale (in four installments).  The total paid to my wife is less than $100,000.00.  We file jointly.  Because of the large amounts wired, I assume the IRS is aware of them.  All payments to her were completed in 2022.

Here's the twist: the buyer insists on signing the final contract of sale in the foreign country.  He is set to do so next week, meaning as of now, my wife and her brother still own the house.  Because the sale is not final, I'm not reporting anything this year, even though the money came in last year.  To the IRS the transfers should look like gifts.

Because of the $100,000.00 threshold, I'm guessing we don't need to submit form 3520, as long as the threshold doesn't decrease.  That said, I'm interested to hear what the experts think.  Thanks in advance!

[DaveF1006 · Accepted solution]

Yes, it states in Form 3520 instructions that you would file if you received More than $100,000 from a nonresident alien individual or a foreign estate (including foreign persons related to that nonresident alien individual or foreign estate) that you treated as gifts or bequests. Since your wife received less than $100,000, there is not a a 3520 reporting requirement.

As an FYI, due to the Bank Secrecy Act, wire transfers are monitored between countries to comply with US Treasury regulations.