tax question ...foreign gift

[IceBergSLiM]

If someone from another country is gifting me cash what are the tax ramifications I should know about.

Does the $10k limit apply or some other limit?

 

[Canun]

Not a CPA or tax preparer, but pretty sure that would go under "Other Income", Line 21 of the 1040. Since it isn't taxed as a gift by the U.S., the government probably still wants their piece of the pie.

 

[Fern]

Under US tax law the recipient of a gift, foreign or domestic, does not owe tax. So, no income tax, no gift tax.

Under US law, it is the donor (giver) who is subject to (US) gift tax. If this person in the foreign country is not a US citizen or Greencard holder they are NOT subject to US law. I.e., they do not owe US (gift) tax either.

BTW: The $10K limit you refer to has been increased.

Fern

 

[EagleKeeper]

If someone from another country is gifting me cash what are the tax ramifications I should know about.

Does the $10k limit apply or some other limit?

You better be able to document that it is a gift

 

[TwiceOver]

I believe the gift tax is actually $13k

IANAL but any transaction over $9999.99 gets sent to the IRS and any gift over 12999.99 has to be claimed. Something like that. Still looking for someone to gift me $12999.99

 

[IceBergSLiM]

so in other words call my damn accountant lol

 

[IceBergSLiM]

You better be able to document that it is a gift

what documentation is required?

 

[EagleKeeper]

what documentation is required?

Enough to convince the IRS (during a hostile audit) that the funds going into your account are not for services rendered.

Paper trail showing where the funds came from and reason/relationship to the provider

 

[IceBergSLiM]

Enough to convince the IRS (during a hostile audit) that the funds going into your account are not for services rendered.

Paper trail showing where the funds came from and reason/relationship to the provider

should be easy enough since its blood relatives

Wouldn't it be easier to just claim it as my money and avoid the whole gift thing?

 

[Fern]

so in other words call my damn accountant lol

should be easy enough since its blood relatives

Wouldn't it be easier to just claim it as my money and avoid the whole gift thing?

You don't need to do anything. Just take the check and cash it.

You are the recipient of the gift. You do not need to concern yourself with gift tax (or any other taxes for that matter).

I'm a tax CPA.

Fern

 

[ericlp]

Loophole...