Requirement to file Form 3520

[lukez]

Hi, 

It is a little confusing in the instructions of form 3520. Do not know exactly if I need to file 3520.

I and my wife filed tax jointly.

In 2022, my wife received gift 95K from foreign person. (from her relative to her personal bank account)

In 2022, I received gift 70K from foreign person. (from my relative to an joint bank account)

Neither of us exceeded the required reporting amount 100K. Does the 100K limit apply to each person, even if we filed tax jointly? Also, does the joint account trigger IRS to think: the 70K  is half for me, and half for my wife?

Thanks so much for any input.

[JohnW152]

The $100,000 limit applies to each person, even if you filed jointly. 

See Joint Returns in the Instructions for Form 3520:  If you and your spouse are filing a joint income tax return for tax year 2021, and you are both transferors, grantors, or beneficiaries of the same foreign trust, then you may file a joint Form 3520. See also a previous relevant discussion here. 

And, on Form 3520, you'll note that there's a checkbox on line1i, If you are filing with your spouse a current-year joint income tax return and a joint Form 3520, check this box.

The instructions for Line 54 in the Instructions for Form 3520 speak to the aggregation of gifts:

To calculate the threshold amount ($100,000), you must aggregate gifts from different foreign nonresident aliens and foreign estates if you know (or have reason to know) that those persons are related to each other or one is acting as a nominee or intermediary for the other. For example, if you receive a gift of $75,000 from nonresident alien individual A and a gift of $40,000 from nonresident alien individual B, and you know that A and B are related, you must answer “Yes” and complete columns (a) through (c) for each gift. 

As far as your last question, there's no indication of what the IRS would assume. 

[lukez]

John,

Thanks for your quick reply. So basically, since my wife and I did not received gift more than the threshold, we do not need to file form 3520. Am I correct?

I just come up with one other question:

If same foreign person send 99K gift to me, and also send 99K gift to my wife, do we need to file form 3520?

Thank you very much.

[DaveF1006]

In reading the IRS instructions for the 3520, this form reports individual transactions rather for married people. If this is the case, then the foreign person is allowed to make a $99K gift to each of you and this is not reported on Form 3520.