Do I need to pay tax with foreign wire transfer received from parents (non-US residents/citizens) living in another country?

[HKJ1985]

I am a greencard holder, and would like to transfer personal funds from my German bank account to US bank account. It’s below $100k. Is personal funds considered taxable income? Or more considered a gift and is therefore non taxable? Also, is it best to transfer everything at once, or in weekly increments of less than $10k?

thanks for clarifying! 

[DanaB27]

No, when you transfer personal funds from your own account this is not taxable income.

In regards to the tax law, it will not matter if you send one amount or multiple smaller amounts.

@HKJ1985

[AlyssaO]

i need some advice…My mom (Thai citizen) transferred me money as a gift about $99,000 to my bank account in USA (i am permanent resident, greencard) but on a transfer bank document, she put as family support because transfer as gift cannot be over $50,000. Do i need to report IRS or pay tax for this this amount $99,000 as family support money? Please advise, thank you.

[Vanessa A]

No, you do not need to pay tax on the money you received from your mom. 

You may need to complete Form 3520 or report this if the following apply:

1.  You are the responsible party for reporting a reportable event that occurred during the current tax year, or you are a U.S. person who transferred property (including cash) to a related foreign trust (or a person related to the trust) in exchange for an obligation or you hold a qualified obligation from that trust that is currently outstanding. 
2.  You are a U.S. person who, during the current tax year, is treated as the owner of any part of the assets of a foreign trust under the rules of sections 671 through 679
3. Your aggregate gifts were more than $100,000

Edited 3/11/2022 @ 8:32AM PST @AlyssaO

[AlyssaO]

Thank you for your advice.

[tina07]

Does this transfer needs to be reported to the IRS?  or not at all?  

(I'm also planning to move some money from my foreign bank account to my US Bank account.)

Thanks!

[Vanessa A]

If you have a foreign bank account, you will need to report it.  You are holding a foreign financial asset and you are also removing money from the foreign financial asset, so you will need to report this if the total of the balance exceeds $10,000 during the tax year.  

Comparison of Form 8938 and FBAR Requirements

[whiteebony]

Thanks for all the info here.

I have a similar situation where my parents who are citizens living abroad and need to wire a large sum of money to me, a US citizen.   I would assume that wire transfer needs to be reported using the same form, but is the amount taxable?  

Or how about if the money is deposited into a joint account where me and parents are account holders, accessible in the foreign country as well as the US.  Do we still have to report that amount, and taxable?

Thank you so much in advance!

[DaveF1006]

Since your parents are US persons, they would need to file a 709 gift tax return if they re "gifting" the money out of their foreign bank account into yours. If it is a joint bank account, then there is no gifting regulation since it is strictly a transfer of money between accounts.

The money that is transferred is not taxable but is reported by both the sending and receiving banks.  Banks must report all wire transfers over $10,000 using a Currency Transaction Report (CTR) and submit it to the Financial Crimes Enforcement Network (FinCEN). You do not have a reporting requirement on your part as this is done strictly within these banks. If there is a issue, the treasury agents will not be shy in contacting you for further information.

As far as FBAR and form 8938 considerations, please review Vanessa A comment in this thread. This is a very important regulation that cannot be overlooked.

@whiteebony

[whiteebony]

Thank you so much @DaveF1006!

Regarding FBAR and form8938, why does it apply to my scenario?  The joint account i have with parents actually is a US bank, only  need to be concerned about FBAR if its a foreign bank correct?

Also, i tried to search irs for my original question about wiring large sum of money and whether taxable but couldnt find any info.  Is there a government link you know of so i can show my parents?  They are very paranoid about being taxed and just want something concrete giving them more assurance.  I had the same understanding as what you posted but they didnt trust me when i told them lol….

[MarilynG1]

You are correct you don't need to be concerned about reporting a wire transfer between branches of a US bank.

It might be that your parents are concerned about the Gift Tax (which they would report), but if you and they are joint account holders, this would not apply.

Here's an IRS link on Comparison of Form 8938 and FBAR Requirements.

This is an IRS Link on Gift Tax. 

[whiteebony]

Thank you @MarilynG1!

Just want to consider all options, what if we decide to wire the money instead, from a foreign bank account to my non joint US account (or possibly the US joint account with parents), then i suppose FBAR and gift tax will apply(if not joint account)?   We possibly might have to go that route since there is no physical branch where my parents are, only ATM.  Anyways, anything else besides wiring fees i need to be aware of?

And regarding the links i was asking about, parents are more concerned about taxing on money they bring in the US, I know their savings are not taxable but they are just very paranoid.

[MarilynG1]

If your parents are not US citizens and don't file a US tax return, if they send money to you in your US bank account, they have 'gifted' you the money. 

Banks have to report deposits of cash over $10,000. But they're not reporting it as income. They're just letting the IRS know that someone was handling a large amount of cash. The IRS knows that most such deposits are legitimate.

In any case, there is no way for you to report a gift that you received on your tax return. The IRS does not want you to report it. You do not pay income tax on a gift.

Nor would you have to report the cash wire transfer (although the bank would), since it's not a foreign account. 

[whiteebony]

Hi @MarilynG1  and thank you again!

My parents are US citizens but it sounds like that dont matter based on what you said.  I actually saw there is a lifetime 11 million allowance before anything will be taxed.  That’s interesting!

The reason we are looking into this is because parents are moving back to the US and they are concerned about bringing money here and getting taxed by the government.  

if we decide to wire, it most likely will be from a foreign bank, in that case i guess we will just have to file FBAR and still not concerned about tax.

I have been telling them there is no tax for bringing their own money in, whether US bank or foreign bank.  again, they are being paranoid lol.

[DaveF1006]

You are correct with your understanding.  There are  Fincen and FBAR filing requirements, covered in other posts, but the money being brought from overseas is not taxable.

@whiteebony