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kjalnes
New Member

Receiving foreign gifts and keeping the amount in foreign account

I am a green card holder and I have a question regarding a foreign gift that my parents want to give my husband and I. 

As far I understand when receiving foreign gifts one needs to file form 3520, and if the gift exceeds $100 000 or if the total gift amount received annually exceeds $100 000 the gift is taxable. 

My question is: If we receive the gift and keep the amount in our foreign bank account in Europe, do we need to report the gift to the IRS? Will we need to file form 3520 in this scenario? The amount has already been taxed in the foreign country.

Grateful for any insight on this. 

5 Replies
KarenJ
Intuit Alumni

Receiving foreign gifts and keeping the amount in foreign account

Yes, you need to report the gift. The conditions to file Form 3520 does not say anything about where the money is located after you receive it. The form is not a tax form only a disclosure form.

Condition to file this form:-

4. You are a U.S. person who, during the current tax year, received either: 

a. 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; or 

b. More than $15,797om foreign corporations or foreign partnerships (including foreign persons related to such foreign corporations or foreign partnerships) that you treated as gifts.

For complete instructions on this form visit - https://www.irs.gov/pub/irs-pdf/i3520.pdf

Please see below regarding the 2 disclosure forms required by the IRS and Treasury Department.

There are certain foreign financial account reporting requirements that US taxpayers must meet annually, in addition to filing a primary tax return (Form 1040, etc.)

In fact, there are two separate disclosure forms that may be required; each also has different reporting rules.  One is known as IRS Form 8938, which is included in TurboTax and can be attached to the relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements


kjalnes
New Member

Receiving foreign gifts and keeping the amount in foreign account

Thank you for the answer! So this applies if the value of the gift from an individual exceeds $100 000? If the gift is less than that amount no form needs to be filed? Thanks again!
KarenJ
Intuit Alumni

Receiving foreign gifts and keeping the amount in foreign account

Yes, if it is less than that , no form is needed.
kjalnes
New Member

Receiving foreign gifts and keeping the amount in foreign account

Thank you for clarifying! In terms of filing US tax returns, how is a foreign gift of less than $100 000 reported in the cases of 1) bringing the money to the US or 2) Keeping the money in the foreign country of origin?
KarenJ
Intuit Alumni

Receiving foreign gifts and keeping the amount in foreign account

You have disclosure forms you need to file if you have foreign accounts. You do not have to report bringing money into the US. However, you may bring up to $10,000 in currency, coin and certain monetary instruments without reporting it to customs.
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