how many can we receive untaxable money from foreign company each year?

[fancychen_78]

My friend's daughter is studying in US and they have a company registered in Hongkong. They would like to have me manage their daughter's living cost in US and sent the money to me through their company's account. How many can they sent to me each year that I don't have to report or not taxable?

[Anonymous_]

@pk?

[xmasbaby0]

Please explain why they want to send money through a business account if the money is for their daughter.  Why not from their personal account?

[Opus 17]

Any person who receives a gift of more than $100,000 from a foreign person or more than $15,000 from a foreign corporation must report that to the IRS on Form 3520.  No tax is owed, but the money must be reported for tracking purposes.

https://www.irs.gov/businesses/gifts-from-foreign-person

This would apply to the daughter receiving funds.

Adding you as an agent makes the situation more complicated.  Are you simply passing the money to the daughter?  Are you taking a fee or commission?  Why don't they pay the daughter directly?  If you are going to hold the funds, will they earn interest?  Who will pay the tax on the interest?

My sense is that since this is the daughter's money, the daughter still files form 3520 and you do not.  However, you may also need to file form 3520.  If you are taking a fee or commission, that raises the stakes even more.  You may want professional tax advice.  

[pk]

@fancychen_78 , having read through this thread and noting the responses of my colleagues @xmasbaby0  and  @Opus 17 ,  I actually find no issue with you  standing in as a guardian / fiduciary  managing the expenses of the   NRA  ( Non-Resident Alien ) student.  As long as you keep good records  of the" incomings" and "outgoings" of the monies.  Since you are only acting as fiduciary and if you don't charge any fees  there is nothing to report.  There is NO  restrictions  ( assuming we are talking about normal / nominal  amounts  passing through your bank account ( or a special account set-up for the purpose  ) and there is no tax event.   Just be aware that your bank will raise  SAR ( Suspicious Activity Report ) for any  US$10,000 or more  transfers -- this is a matter of course and then nothing happens to then.

I am assuming here that the NRA student is a minor  or being treated as a minor by the parents ( NRAs also  ? ).

That is my view  -- and others may disagree on my interpretation of the situation.

Note that if you charge a fee to act as a fiduciary then that is income to you and must be recognized as such.

Isa there more one of us can do for you ?

pk

[fancychen_78]

Thanks so much for responding to my question. I don't charge any fee from my friends and just simply pass the money to their daughter month by month to prevent the student from using it all at once. However, the NRS student is over 18. 

[fancychen_78]

I don't know exact reason. The parents just inform me they will transfer the money through their company's count. 

[xmasbaby0]

Ever hear the saying "No good deed goes unpunished?"   Do you really want to put yourself in the middle of a questionable transfer of a parent's company funds and deal with a college age kid who wants to spend it?

[pk]

@fancychen_78 , agreeing with  @xmasbaby0 , that you consider protecting yourself  in making sure NOT TO Comingle  your own funds with that from this  fiduciary activity for a friend/ relative  -- keep a separate account etc. And a clean agreement as to your duties and responsibilities.

If the student is older  than 18 there is still nothing that stops you from acting as a fiduciary  but you should have a clear agreement  ( written  is preferable for your own protection ) as to your duties / responsibilities. 

Is there more help you need ?

pk

[Opus 17]

I agree with @pk .  There are no special tax requirements, but for your own protection, you should have a written agreement with the parents as to what the money is to be used for and what it is not; you should have a separate bank account; and you should keep good records.

One final thing I will add, is that you should not intentionally try to keep your transactions under $10,000 to avoid US banking reporting laws.  If the parents want to transfer (for example) $20,000, just do that, don't make it 4 separate transfers of $5000 each.  In some cases, it can be a legal problem to "structure" your transactions to avoid the reporting rules, even if the purpose of the transfers is entirely innocent and legal.