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Posted by jmail7 on August 30, 2008, 3:50 pm
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> Question: it is our understanding that a US person who receives up to
> $ 100,000 from a non-resident relative during a given tax year does
> not need to file form 3520 (and that this event does not attract
> taxes). Now, what happens if a US couple receives $ 100.000 each,
> from, let's say, the same non-US & non-resident relative? Does the
> foreign tax reporting exclusion still applies to the husband and the
> wife separately or is it considered to be a "joint" gift of 200.000 ?
> Does a joint tax return affect the above mentioned exclusion(s)?
The $100,000 reporting requirement is per individual. Thus, two gifts
from a nonresident noncitizen to two U.S. individuals of $99,000 would
not need to be reported on Form 3520. However, because the penalties
can be up to 25% of the gift received, in this circumstance, I would
recommend that Form 3520 be filed in any case. There is no tax due
whether you file the form or not. It is simply a disclosure form and
very easy to complete (Part IV). If you don't file the form and the
IRS learns that you recently came into a lot of cash, they may have
some questions. If you have already filed Form 3520, the IRS wouldn't
even need to ask where you got the cash.
Andrew Mitchel, Esq.
Essex, Connecticut
http://www.andrewmitchel.com
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