Gift from parents

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invent5
Posts: 13
Joined: Sun Feb 25, 2018 3:21 pm

Gift from parents

Post by invent5 » Wed Mar 07, 2018 11:53 am

Hi.

I was wondering if parents are non US citizen and want to write up will or give gift to their kids who are US citizens and working or to grand kids who are still in school, how could they give it in non-US based currency to US citizen. I would assume they will give it in their local currency and then the US citizen kid will need to covert it to US dollar and specify while filing taxes that as gift received in US dollars? I will appreciate your help on what is the process involved and how its done.

Thanks.

DIFAR31
Posts: 128
Joined: Mon Jan 01, 2018 5:51 pm

Re: Gift from parents

Post by DIFAR31 » Wed Mar 07, 2018 12:13 pm

Gifts are not taxable to the gift recipient and are therefore not reported on the recipient's tax return. It sounds like your main problem here would be converting a foreign currency to U.S. dollars. A bank should be able to help you with that, for a fee.

Gill
Posts: 4631
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Gift from parents

Post by Gill » Wed Mar 07, 2018 3:22 pm

DIFAR31 wrote:
Wed Mar 07, 2018 12:13 pm
Gifts are not taxable to the gift recipient and are therefore not reported on the recipient's tax return. It sounds like your main problem here would be converting a foreign currency to U.S. dollars. A bank should be able to help you with that, for a fee.
However, there is a requirement to report gifts from foreign persons exceeding $100,000. This is reported on IRS Form 3520. There is no tax involved.
Gill

ralph124cf
Posts: 2007
Joined: Tue Apr 01, 2014 11:41 am

Re: Gift from parents

Post by ralph124cf » Wed Mar 07, 2018 4:46 pm

Depending on what foreign currency you are talking about, US banks are incompetent/greedy. I have seen rates from 5% to as much as 30% for the conversion. Most US banks won't even quote a firm rate, they will make you deposit the money and send it in for conversion at their main office.

Generally foreign banks are much more accommodating and competent in this regard. If possible, it would be much more convenient to do the conversion in the home country. Each person can bring in up to $10,000 USD with no paperwork, and there is no limit provided you fill out the appropriate paperwork, although I would be concerned about thieves.'

Amex or Western Union are also means of transferring cash while converting currency. This may be your best bet.

Ralph

autolycus
Posts: 171
Joined: Thu Jul 31, 2014 3:01 pm

Re: Gift from parents

Post by autolycus » Thu Mar 08, 2018 9:14 am

Each person can bring in up to $10,000 USD with no paperwork
You're talking about cash here. Also, that's not really correct. It's $10,000 total for people traveling together. 4 family members traveling together and each carrying $5,000 have to report $20,000. Do not mess with this. Failure to report can result in forfeiture.

https://help.cbp.gov/app/answers/detail ... o-or-leave

InternationalMan
Posts: 42
Joined: Tue Mar 03, 2009 9:38 pm

Re: Gift from parents

Post by InternationalMan » Thu Mar 08, 2018 4:42 pm

invent5 wrote:
Wed Mar 07, 2018 11:53 am
I was wondering if parents are non US citizen and want to write up will or give gift to their kids who are US citizens and working or to grand kids who are still in school, how could they give it in non-US based currency to US citizen. I would assume they will give it in their local currency and then the US citizen kid will need to covert it to US dollar and specify while filing taxes that as gift received in US dollars? I will appreciate your help on what is the process involved and how its done.
One has to be careful with US taxpayers inheriting/receiving gifts from non-resident aliens. The IRS rules are confusing and making mistakes can be costly. If performed correctly there should be no US taxes. Here is a primer

https://www.goldinglawyers.com/u-s-tax- ... reporting/

I would recommend the parent make the gift/inheritance of non-US situs property from a bank outside of the USA. A simple way is to have the parents wire the funds from their overseas bank account to the recipient's US bank account. Either bank or an intermediary bank could perform the exchange to USD. If the amount of money is large a law firm should probably be consulted and maybe a trust or similar wealth planning strategy considered.

expatjoe
Posts: 2
Joined: Fri Aug 10, 2018 7:32 pm

Re: Gift from parents

Post by expatjoe » Fri Aug 10, 2018 7:36 pm

I found this thread looking for the same thing. It looks like it's not if the person giving the gift is not a U.S. resident.

Here's a source: https://www.kpateloffice.com/gifts-fore ... form-3520/

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