My parents live overseas and they want to gift me some tens of thousands of dollars. The money might not come directly from their account, heck we might even use cryptocurrencies to move the money easily.
Since this is gift from my parents, it should be tax-free.
At the time of filing my taxes, or later if IRS audits me, what kind of documents do I need to provide? I want to make sure I get those documents now at the time of moving the money, or avoid any form of moving that is not acceptable by the IRS.
Hi moosa27,
Thanks for the question. A single gift of $16,000 or $32,000 total from both you parents qualifies for the annual gift exclusion. A letter from your parents and a copy of the bank statement may be enough. However, if your parents give more than that in a single year, they will be required to file a gift tax return on Form 709, assuming they are American citizens. A detailed properly filed Form 709 would provide a lot of documentation for you in the event of an audit.
Here is a link to the IRS site about Gift Tax with many other helpful l inks. FAQs for Gifting.
If you need any additional information feel free to follow up.