Is the 100k foreign gift tax-free limit per individual or per couple if my husband and I file jointly?

[emilycrinage]

My UK Citizen father wants to gift us (US citizen husband, permanent resident me) $150,000. 

My husband and I file taxes jointly.

If my father transferred $99,000 into my personal US account from UK and $51,000 into my husbands personal US account from UK would these be considered separate foreign gifts and under 100k, therefore, we would not have to fill out form 3520? 

[Critter]

This is a per person requirement so in this case no form 3520 is required.

[Critter]

If your parents are not US citizens or residents of the US, there are no US tax implications for them.

If you, as a US person, receive a gift of more than $100,000 from a foreign person, you are required to submit a Form 3520 to the IRS.  Form 3520 is an informational form only.  You do not report a gift received on your personal tax return, regardless of the amount received.

IRS Form 3520 - http://www.irs.gov/pub/irs-pdf/f3520.pdf

IRS Form 3520 instructions - http://www.irs.gov/pub/irs-pdf/i3520.pdf

http://www.irs.gov/Businesses/Gifts-from-Foreign-Person

[mellisa4283]

Is 100 k taxable if the money is received from a non us resident from china? Would you be able to provide the section an codes?

[DoninGA · Accepted solution]

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@mellisa4283 wrote:

Is 100 k taxable if the money is received from a non us resident from china? Would you be able to provide the section an codes?

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Gifts received from an individual are not reported on a tax return, regardless of the amount received.

However, gifts received from a foreign individual in the amount more than $100,000 have to be reported to the IRS using Form 3520.  There are no taxes owed on the gift received but the gift must be reported to the IRS.  TurboTax does not support Form 3520.

IRS Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts - https://www.irs.gov/forms-pubs/about-form-3520

[BoltZilla]

What if the gift (exceeds 100k) is deposited to

a. a joint account?

b. a trust account with multiple trustees?

[KurtL1]

The Form 3520 is required to be filed by a U.S. person. A U.S. Person is:

• A citizen or resident alien of the United States (see Pub. 519, U.S. Tax Guide for Aliens, for guidance on determining resident alien status),
• A domestic partnership, • A domestic corporation,
• Any estate (other than a foreign estate, within the meaning of section 7701(a)(31)(A)), and
• Any domestic trust (defined earlier).

You are required to file Form 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.

If the funds are transferred into a joint account, then it is subject to the $100,00 limitation. You would file a joint Form 3520.  If you and your spouse are filing a joint Form 3520, please check the box on line 1i on page 1.

If the Trust is a domestic trust, and the amount exceeds $100,000 the trust would be required to file the Form 3520.

[chen123]

If each of us (my husband and I) received <$100k gift from other nonresident aliens (not parents) oversee in our individual bank account, is it required to file form 3520 for us? We file married joint tax return.

Thanks,

Chen123

[PattiF]

No, it is not required that you fill out Form 3520. The $100,000 amount applies to each individual.

[RacknarockGod]

Thank you for this information. 

Is it correct that the $100,000 is for the year? In other words, if another gift is given in the following year, as long as it is less than $100,000 it is not to be reported.

In the future, if we get an IRS audit, do we need to proof that it was a foreign gift? If so, how could we do that?

[DoninGA]

@RacknarockGod Yes, it is more than $100,000 per year that has to be reported.  If the amount is $100K or less the gift is not reported to the IRS using Form 3520 or on a tax return.  This reporting requirement of a gift received is only when the giver of the gift is a foreign person.

Gifts received are never reported on a tax return so the IRS will not audit you for these gifts.

However, banks are required to report cash deposits of $10,000 or more to the IRS.  This was established to assist in money laundering criminal investigations.

[RacknarockGod]

Thank you again!

Since "banks are required to report cash deposits of $10,000 or more to the IRS", how would IRS interpret this deposit? Would they assume that it is a gift?

[DoninGA]

How the IRS interprets the information received from banks is not something we would know.  I would not be to concerned about this if the funds received are all above board.