I am curious about the following scenario between 2 trusted persons.
A has $20,000 in the US that he wants to use overseas.
B has an equivalent amount in foreign currency overseas that he wants to use in the US.
Both want to avoid transfer fees so...
A writes a check to B in the US for $20,000
B transfers the equivalent amount to A in the foreign country.
They agree to amounts based on the exchange rate and no money crosses international borders. Both A and B earned their money legally and intend to use it legally.
What are the implications in the US?
Is it counted as income?
Is it counted as a gift?
Does either party have to pay taxes or make declarations on the $20K transfer?
2007-04-04 10:39:55 · 3 answers · asked by John K 4 in Business & Finance ➔ Personal Finance
The system you describe is called Hawala (or Hundi) and has been used for centuries by both Indian and Chinese traders.
It is not income, and neither is it a gift. Rather it is an economic transaction or exchange. No tax is payable, however the IRS might want to be informed as US citizens are supposed to declare foreign assets.
2007-04-04 11:10:11 · answer #1 · answered by Hokonui Software 2 · 0⤊ 0⤋
It is neither income nor a gift; even value was exchanged. It would be a good idea to fill out the Treasury form with respect to money movements over $10,000. I see no problems with the scheme.
2007-04-04 10:56:17 · answer #2 · answered by Anonymous · 0⤊ 0⤋
In u . s . you will possibly desire to be 18yrs previous to have interaction in any corporation transaction. the place you reside probable American show or Walmart save could be waiting to subject a money order for as much as 40. what are you identifying to purchase something be careful over the internet. you;d might desire to ask what their regulations are.
2016-11-26 02:37:36 · answer #3 · answered by ? 4 · 0⤊ 0⤋