Financial Gift from a Foreign Bank Transfer

[happycamper0321]

My mother is a dual citizen of both the U.S. and Mexico (born in Mexico became a U.S. citizen later in life). She recently sold land she owned in Mexico and the money from the sale is in her Mexico bank. She wants to distribute equal portions of the sale as gifts to her children that are all U.S. citizens, reside in the U.S., and have U.S. banks. Is this taxable or is it not?

Thanks in advance for the help with this question!

[DoninGA · Accepted solution]

Gifts received are not reported on a tax return, regardless of the amount received.

The giver of a gift does not report the gift given on a tax return.  However, if the gift given to a single individual is greater than $15,000 then the gift is reported to the IRS using IRS Form 709.  There will be no taxes owed on the gifts given if the total of all gifts ever given is less than $11.58 million.

TurboTax does not support IRS Form 709

IRS Form 709 - https://www.irs.gov/forms-pubs/about-form-709

[happycamper0321]

Thank you!

[happycamper0321]

Thank you for the response! I have a follow up question regarding IRS form 709. What section of the form would the amount of cash given to the individual go on the form? My mother and I find it a bit confusing. 

Thank you in advance.

[DaveF1006]

@happycamper0321  Before you record the amount of the gift, you must fill out Schedule A entitled —Gifts Subject Only to Gift Tax. Here are details of the gift including adjusted basis, date, amount of gift etc. In addition, you will need to fill out Schedule B if you gave prior gifts.

Once these are complete, you will record the amount of the gift on line 1, part 2 of the form. If you need to fill out Schedule B, the amount will be recorded on Line 2 Part 2. Then on line 3, you will add line 1 and line 2 totals for the amount of gifts that will be taxed. For more specific details regarding form 709, please read the instructions for form 709 here.