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Gift tax rules (non-citizen in-laws)

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  • Gift tax rules (non-citizen in-laws)

    I am a US citizen but my wife is not. Her parents live overseas and are somewhat well off. Recently, they expressed interest in gifting us about ~$50K in cash to put toward our mortgage and expenses.

    From my own reading, it seems like the IRS doesn't require any declaration as long as a gift is <$100K/y. Further, it wouldn't matter if they gifted it to me or directly to her.

    Does anyone have experience with this? Thanks.





  • #2
    i'm not an accountant but the IRS guide on this seems pretty clear
    in my personal experience when the IRS site is as clear as this there is no reason to seek professional help
    this seems fine and i wouldn't worry about it
    even in excess of $100k i don't think it would be taxable but i'm not sure about that


    General Rule: Foreign Gifts and Bequests

    In general, a foreign gift or bequest is any amount received from a person other than a U.S. person (a foreign person) that the recipient treats as a gift or bequest and excludes from gross income. A foreign gift does not include amounts paid for qualified tuition or medical payments made on behalf of the U.S. person.

    A foreign person includes a nonresident alien individual or foreign corporation, partnership or estate, as well as a domestic trust that is treated as owned by a foreign person. Distributions from a foreign trust are reportable on Part III of Form 3520. See instructions to Part IV of Form 3520 for more information.
    Reporting Requirements


    You are required to report the receipt of foreign gifts or bequests only if the applicable thresholds apply. For purposes of determining the reporting thresholds, you must aggregate gifts received from related parties. See the instructions to Part IV of Form 3520 for more information; see also Section VI of Notice 97-34PDF.
    • For gifts or bequests from a nonresident alien or foreign estate, you are required to report the receipt of such gifts or bequests only if the aggregate amount received from that nonresident alien or foreign estate exceeds $100,000 during the taxable year. If the gifts or bequests exceed $100,000, you must separately identify each gift in excess of $5,000.
    • For purported gifts from foreign corporations or foreign partnerships, you are required to report the receipt of such purported gifts only if the aggregate amount received from all entities exceeds $16,649 for 2020 (adjusted annually for inflation). You must separately identify each gift and the identity of the donor. Note that the IRS may recharacterize purported gifts from foreign corporations or foreign partnerships.


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    • #3
      Thanks. That's exactly what I found too. I appreciate the moral support.

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