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
