Filing Form 3520 For Foreign Gift or Inheritance

[W]

As I understand it, a gift from a foreign person to a U.S. person is not
taxable to the receiver. If however the gift exceeds $100K, then a form
3520 must be filed to declare the gift. My question is what happens in a
case where a U.S. person receives two or more gifts from different people
over the course of one tax year, the sum of which exceeds $100K?

Is the $100K actually a threshold that applies to all gifts received, and
once that threshold is crossed, then you are obligated to itemize each and
every gift received during that year?

 

[removeps-groups]

As I understand it, a gift from a foreign person to a U.S. person is not
taxable to the receiver.  If however the gift exceeds $100K, then a form
3520 must be filed to declare the gift.   My question is what happens in a
case where a U.S. person receives two or more gifts from different people
over the course of one tax year, the sum of which exceeds $100K?

Is the $100K actually a threshold that applies to all gifts received, and
once that threshold is crossed, then you are obligated to itemize each and
every gift received during that year?

See the instructions to form 3520. The 100k limit applies to a single
gift. If you receive two gifts of 99k, there may be no reporting
requirement. If the gifts are from related people, then they are
considered one, and form 3520 is required.

Quotes:

http://www.irs.gov/instructions/i3520/ch01.html#d0e47

Who Must File

You are a U.S. person who, during the current tax year, received
either:
1. More than $100,000 from a nonresident alien individual or
a foreign estate (including foreign persons related to that
nonresident alien individual or foreign estate) that you treated as
gifts or bequests; or



Related Person

A related person generally includes any person who is related to you
for purposes of section 267 and 707(b). This includes, but is not
limited to:

*

A member of your family—your brothers and sisters, half-brothers
and half-sisters, spouse, ancestors (parents, grandparents, etc.),
lineal descendants (children, grandchildren, etc.), and the spouses of
any of these persons.
*

A corporation in which you, directly or indirectly, own more
than 50% in value of the outstanding stock.

See section 643(i)(2)(B) and the regulations under sections 267 and 707
(b).

 

[Simon Baldwin]

As I understand it, a gift from a foreign person to a U.S. person is not
taxable to the receiver...

Not always true.

Section 2801 (HEART act, 17th June 2008) imposes a transfer tax on
*recipients* of certain gifts and bequests.

www.lanepowell.com/wp-content/uploads/2009/04/tlh_2008_0007.pdf

 

[Stuart A. Bronstein]

Section 2801 (HEART act, 17th June 2008) imposes a transfer tax on
*recipients* of certain gifts and bequests.

www.lanepowell.com/wp-content/uploads/2009/04/tlh_2008_0007.pdf

Thanks. That's good to know.

 

[removeps-groups]

Not always true.

Section 2801 (HEART act, 17th June 2008) imposes a transfer tax on
*recipients* of certain gifts and bequests.

www.lanepowell.com/wp-content/uploads/2009/04/tlh_2008_0007.pdf

This only applies if the giver of the gift expatriated after June/
16/2008.