Can a relative living outside U.S. give me $100,000+? Will I have to pay U.S. tax?

Answer 1

Wow, what a fascinating array of WRONG answers! And a couple of correct ones!

Bona-fide gifts are generally not taxed to the recipient. There MIGHT be a tax liability on the part of the donor depending upon the circumstances and how much of their lifetime and annual gift tax exclusions they've used.

Making a large deposit like that may well give rise to questions and your bank may require you to file some declarations regarding the source of the funds. Be straight with your answers and there won't be any problems. The IRS might want to see proof that the funds are a gift -- Non-resident Aliens are required to file gift tax returns for gifts to US Citizens of property in the US and that would satisfy the IRS that the gift was legitimate.

If the donor was require to file a gift tax return and pay tax and failed to do so, you might have to pay the gift tax yourself.

Answer 2

If it is genuinely a gift, there is no tax bill for the recipient. You just have to prove it really is a gift.

Those who talk about the $10,000 and $11,000 limits are mis-informed. Those limits relate to the giver - the amount the giver can give each recipient before the giver becomes liable for Gift Tax.

Get to an accountant and lawyer. They will tell you if you have adequate proof that the gift is indeed that.

Beware, though. Anyone who "helps out" someone from overseas by accepting a gift which really isn't runs a high risk of going to prison for several years. This may not be your situation, but I thought I would mention it anyway.

Answer 3

No, you won't have to pay tax because it is not income. Your relative will have to file a gift tax return if he is a US citizen. Even if he is a citizen, he may not owe any tax. I assume the money is not cash, a wire transfer or check.

Just make sure it really is a gift.

From IRS:
The person who receives your gift or your estate generally will not have to pay any gift tax or estate tax because of it. In addition, that person will not have to pay income tax on the value of the gift or inheritance received.

Answer 4

YES!!!!! If you are a citizen of the USA you must file a tax return. Whether or not you have anything to pay is another story. If your company is paying you out of the USA then you will be taxed. Anyone who tells you if you live outside of the USA and are a USA citizen that you dont have to pay taxes is dead wrong. You must file a return!

Answer 5

Anything over $10,000 is subject to IRS scrutiny, and there are forms you have to fill out for them regarding the money transfer. This came about to reduce the money laundering the drug lords were doing in the 70's. If it is a gift it falls under a different tax structure. They WILL audit you and slap you silly for income tax if it smells like anything but a gift... ask anyone who's run into the IRS over sudden money appearing out of thin air!

If it is an inheritance there are different rules that apply. Your best bet is to contact a tax attorney (not an accountant, an attorney) and have him look at the transaction to show you how to do it legally.

Answer 6

Make sure that you do not deposit anything $10,000 or higher into your bank account in one banking day. Also, if you own multiple accounts with the same bank and make deposits (even at separate branches) on the same day that total $10,000 or more, they will most likely report it. This includes wire transfers. Also, do not purchase monetary instruments such as money orders, cashiers checks, or traveler's checks.

I would also look into HOW the money that you are going to receive is going to be handled on paper. If they are doing it through transfer of estate or as a gift through a bond or something that you will have to cash, you might want to ask an Enrolled Agent what the federal reporting guidelines are. Sometimes paying the tax is much less than any penalty you would receive for trying to hide the money. Not to mention that money laundering is a federal offense.

Answer 7

I can tell you one thing with confidence. The recipient is not the one who has the tax issue. Beyond that I would recommend you reread "open4one" answer, then contact a CPA or tax attorney to confirm his position. Don't forget, a State may want a bite of that money even if the Feds don't.

Answer 8

$10,000 is the maximum you can receive from an individual in a calendar year and still have it considered untaxable. Any thing over $10k has to be reported, and a gift tax paid. Consult your accountant or tax ottorney for more advice.

If you are married and/or have kids, this is a per person limit - so your relative can give you $10k, your wife $10k, your kids $10k, etc.

I would work something out with your relative to give you the money in $10k increments over the next few years. If they put it in an interest bearing account, and pay you from that, you could conceivably make a little extra money as well.

Answer 9

The recipient of a gift does not pay the tax on said gift. The person giving the gift is the one who is responsible for the tax. as long as you can prove it is a gift you dont have to worry about taxes.

Answer 10

It used to be that a US citizen could receive a gift of up to $10,000 without having to pay income tax on it. I believe that figure has been revised upward somewhat, but I do not know the precise amount--that you will to consult with a tax specialist about. In fact, you should present these questions to a tax specialist.

And the $10,000 rule (reported to the IRS) pertains to cash deposits or withdrawals--then a card has to be filled out and sent to the IRS (but even this rule is subject to where the bank is located).