Are there any tax consequences of a U.S. citizen receiving over $100,000 as a gift from foreign parents?

by Susan E. S. Howe, CPA | Aug 30, 2018

I am a U.S. citizen living in the United States. My parents, who live in another country and are not U.S. citizens/residents/immigrants, would like to send me more than $100,000 as a gift. Are there any tax consequences for me as the recipient of this gift? Is there an upper limit to the amount that I can receive as a gift from a foreign person? Is there any documentation/form I have to file before or after receiving the gift? 

There are no income tax implications for you as a U.S. citizen to receiving a gift from non-U.S. citizens. There are a couple of other considerations, however. If you receive the gift in non-U.S. currency and subsequently exchange it for U.S. dollars, there could be an exchange rate gain. If you receive a gift of more than $100,000 U.S. dollars or equivalent from a foreign person, there is a requirement to file Form 3520 to report the gift. This is an informational/disclosure report without tax consequences, but there are potentially severe penalties for failing to file this form. Form 3520 is due the year after the receipt of the gift on the same schedule as your U.S. income tax return. So, for a gift made in October 2018, for example, Form 3520 would be due on April 15, 2019 (or Oct. 15, 2019, if the recipient's U.S. tax return filing has been extended).

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Answered by: Susan E. S. Howe, CPA, is principal of Howe Advisory in Strafford, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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