International wire transfer over $10k
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Caqs82
Returning Member

International wire transfer over $10k

My mother wants to send me my part of the inheritance early from my father passing away in 2004 (over 10k less than 100k). We are trying to figure out how to get it to me without overpaying in taxes. Right now the money is under my mother's name.

Options I have thought about and questions about them:

 

1) Do multiple $10k transactions since I know a wire transfer of less than 10k doesn't get reported to the IRS.

Q-  Is that per transaction or per year? Example: can she just do 3 wire transfers for 9k totaling 27k? Or do those 3 wire transfers need to be on different years for them not to be taxed?

 

2) Put the money in a personal account in Colombia, and then wire transfer the money from personal account to personal account.

Q- Would this work? Is this taxable?

 

3) My mom to wire the money to me and reported as a gift.

 

That's what I come up with, any ideas of what the best way to do it?

3 Replies
pk
Level 12
Level 12

International wire transfer over $10k

@Caqs82 , the simplest and most direct way to do this is to have your mother wire the funds to your bank account in the USA.  The bank may raise a SAR but that is routine -- nothing to worry about.  Then along with your 2020 return you will have to file a form 3520   just to say that you have received  a disbursement from a foreign person/trust/estate  ( if  equal to or over US$100,000  ).  Otherwise nothing is required.  All the methods you were thinking of  may create more issues and looking into. Straight and upfront is the easiest and best way.  Note that inheritance  is not taxed in the USA  ( 3520 is only a recognition reporting  and usually has no tax implications ).

 

Is there more I can do for you ?

Caqs82
Returning Member

International wire transfer over $10k

@pkThank you for your response, I want to make sure I understand what you just said.

 

Because it is more than $10k the bank is going to report it, I don't have to worry about it on my 2020 taxes because it is LESS than $100k.

OR

Tax wise I don't have to worry but I still need to report it with a 3520 form.

Opus 17
Level 15

International wire transfer over $10k


@Caqs82 wrote:

@pkThank you for your response, I want to make sure I understand what you just said.

 

Because it is more than $10k the bank is going to report it, I don't have to worry about it on my 2020 taxes because it is LESS than $100k.

OR

Tax wise I don't have to worry but I still need to report it with a 3520 form.


Gifts are never** taxable to the recipient under US tax law.  You won't owe tax whether the gift is more than $10,000 or more than $100,000.

 

A gift from a foreign person over $100,000 must be reported on form 3520, but it is not taxed.  This is based on the total amount, so breaking it up into smaller amount doesn't change the requirement to file the report. 

 

Cash/money transfers over $10,000 are reported automatically by the bank, you don't have to do anything.  However, if you turn one large transaction into several small transactions to avoid the reporting requirement, that can be considered a money laundering crime called "structuring".  So just take the money as simply and directly as you can.  

 

**In some cases, there is apparently gift tax if a foreign person gives US property to a US person.  Such as, your mother, who is not a US resident, owns a mansion in Florida and wants to give it to you as a US resident.  This is an in situs gift, it's complicated, and every time I try to study it I get more confused.  But it doesn't apply to money gifts and it certain doesn't apply to money from foreign sources.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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