Hello,
My parents (US citizens residing in India) are planning to transfer about $120,000 from their Indian bank to USA for me to gift as i am in the verge of buying a new house.
I read that $14,000 transfer per person is considered as a gift. I fill jointly with my wife so i am aware $28,000 money can be considered as a gift. I am also aware anything more than the initial gift money has to be reported to US government while filling taxes. I want to know will i have to pay any taxes for the remaining non gift money ($92,000)
Is there any thing that i should be aware of before my parents make the transfer?
I also want to know where exactly do i report this additional wire transfer on my taxes? What column?
You refer to "borrow" but then "gift." Which is it? Is there a signed loan agreement?
A gift received from an individual is not reported on tax return, regardless of the amount received.
Since the parents are US citizens they are required to complete a Gift tax return, Form 709, for any amount given to a single individual over $14,000. Unless they have made over $5.43 million in gifts over the years, there will be no gift taxes owed.
IRS Form 709 - https://www.irs.gov/pub/irs-pdf/f709.pdf
IRS Form 709 instructions - https://www.irs.gov/pub/irs-pdf/i709.pdf
Sorry, I just saw that you posted that your parents are US citizens. I have changed my answer accordingly. Please return to this thread on the website to view the correct answer.
So you are saying my parents will have to fill out Form 709? Since they are not residing here in USA - they do not fill taxes since no US income - should i be filling any forms on their behalf?
A US citizen is required to report all worldwide income, earned or unearned, on a federal tax return, US sourced or foreign sourced.
If they have no income whatsoever, they would still need to file the Form 709 Gift Tax return. There are no forms that you would file on their behalf.