Should I file form 3520 and how on Turbotax?

[JudyJY]

I am an F-1 status international student starting from 2021 (before this F-1 visa, I only got a B-2 visa), and I received more than $100,000 by wire transfer from my parents (nonresident alien individuals) in 2023. Do I need to file Form 3520 for the 2023 tax year as a non-resident alien? If I need to file, how would I do that in TurboTax?

[Anonymous_]

@pk?

[pk · Accepted solution]

@JudyJY , from your post it is unclear  fi you are a resident for tax purposes ( have passed Substantial Presence Test  --- 183 days presence counting all days present in the tax year , plus 1/3rd the days present in the  1st. previous  year and 1/6th days present in the 2nd previous year ) and thus cannot answer  your query.

Generally though  if you are a US person ( citizen/GreenCard / Resident for Tax purposes ), you would need to report/recognize  gifts of US$100,000 or more from a Non-Resident Alien.  Also as a US person you will need to file  your tax return on form 1040, be taxed on your world income  and can use TurboTax to prepare and file your return.    On the other hand  as a Non-Resident Alien ( present in the US but not having met the  SPT ) you file your return on form 1040-NR ( not supported by TurboTax but have to use SprinTax or similar services or tax professional ), be taxed ONLY on US sourced income and no requirement to file form 3520 to recognize  gifts  from NRA persons / entities.

Please provide details of your situation , so  a focused answer could be provided .

pk

[JudyJY]

Hi @pk,

Thank you very much for your reply! I passed the Substantial Presence Test for the 2023 tax year. However, I am a F-1 status student, and I don't know if I am an exempt individual for the Substantial Presence Test since I only got the F-1 type visa for three years. Also, if I am an exempt individual, does that means I am a Nonresident Alien for tax purpose?

Thanks!

[pk · Accepted solution]

@JudyJY , generally if you had not been in the USA at all during the prior three years, or never used the exempt  status ( F, M, J etc. ) then you should be exempt for five calendar years.   During exempt days , you nto counting days  present AND you are therefore a Non-Resident Alien.  I am giving general  answer because I still don't know when you entered the USA with F-1 and if you had been to the USA  ( what visa, which years and for how many days each time).   I do see that you were in the USA with B visa   but I need the whole story here .   I also don't understand why your visa is for three years and not the usual five years --- what education are you doing  ( is it a course  for two/ three years ? ), like an MS or special training or what ?

My suspicion is that you are probably still an exempt  person, Non-Resident Alien.

Note that  the tax treaty  with most countries, monies received by students from home country  is not taxable income  ( so please tell me the country where your parents reside and/or are citizen of ).  Of course you should also note that your US bank would have raised a SAR ( Suspicious Activity Report ) as a matter of course  on any activity above US$ 10,000.  Mostly nothing happens to these.

I will circle back once I hear from you 

pk

[JudyJY]

Hi @pk,

Thank you so much for your detailed explanation! I am a PhD student right now, and both my parents are from China. The first time my F-1 visa was issued was in 2021 for a master's degree program. After that, I applied for PhD program and got my second F-1 visa in 2023. The total days I spent in the US with an F-1 visa status are 2021:127 days, 2022:365 days, and 2023:213 days. The total days I spent in the US with a B-2 visa status are 2014:14 days and 2017:29 days. Under this condition, according to your previous explanation, does that means I am currently an NRA for tax purpose, so I am not required to submit Form 3520? Also, does this mean I still have two years of exempt days as an F-1 visa holder?

Best

[pk]

@JudyJY , based on your reply as to the number of days in the USA and your F-1 visa extension, I am confident that you are still with the exemption period   i.e. your original exemption runs  for the calendar years 2021 through end of 2025 unless your visa status is adjusted.  Thus you are not counting days present  leaving you as a Non-Resident Aline ( NRA ) and therefore immune from having to report  receipt of monies from foreign person(s).  No 3520 for you.

Also note that  you are taxed on ONLY US sourced/ connected income  and you file your return on form 1040-NR ( not supported by TurboTax ( but by the likes of SprinTax, or similar or tax professional  or persons ref'd. by your foreign students support at you school ).

Is there more I can do for you ?

Xie Xie

pk