Is there an IRS tax on a gift of money from an international source?

Question

My mom is getting an inheritance in South Korea (a house of her father is being sold and proceeds being split among siblings).

When she brings that money back to the United States, will there be taxes due to the IRS from essentially an international inheritance (taxes in Korea were already paid)?

If instead of keeping it herself she wants to give the money to me or my sister, is there a gift tax due to the IRS (filling out a gift tax form and just using up part of my mom and dad's lifetime gift exemption to me and my sister)?

And what is the actual best method of having those international funds transferred to an U. S. account? (wire transfer, actual check, other?)

Thanks for the responses below.

I called the IRS and they said the same thing. Only other thing they added was that Treasury / Customs form FinCEN-105 (report of international transportation of currency or monetary instruments) had to be filled out within 15 days of that international transfer.

Read instructions for form FinCEN-105.

Apparently only applies to physical transfer of currency across borders. Don't need to fill out for electronic transfer.

Answer 1

is your mother a U.S. citizen?
The money she inherits is not taxable in U.S.
If she gives you more than $12,000. per year she would be liable for gift tax. Your dad can also gift to you $12,000. per year for total of $24,000. They can also do the same with your sister.
A check from a foreign country is a nightmare and will cost you a couple hundred to get the money,, wire transfer is the best,, fastest,, safest way. They will no doubt be paying some fee to exchange the money into U.S. dollars.
The source is your mother.

Answer 2

One thing no one appears the have mentioned so far is that while there is no FEDERAL inheritance tax in the US, some STATES have an inheritance tax. Check into that for the state where your mother lives.

I would recommend a wire transfer for actually moving the funds. The bank already knows all the reporting requirements and there is little to no risk of loss in transit.

Answer 3

This is not a gift of money from a foreign source. Your mother is inheriting the proceeds from the sale of the home. The inheritance is not taxed. Assuming the home was sold before it appreciated in value, there will be no capital gains to tax.

If she then gives you a gift of money, that is a gift from her, not from the foreign source. The gift is not taxed, but a gift tax return may be required of your mother if the gift is over $12,000.

As for the money transfer, deal with the financial institution handling the sale to have the proceeds sent directly to the US bank.

Answer 4

I believe there is no tax, but you have to fill out a form if over $100,000 - I believe a 5520. If it is over that amount, make sure you check with a int'l tax lawyer.

If your mom wants to give you the money - make sure it goes directly to you from Korea to avoid any gift taxes from your mom. Or she can give you guys up to $9,999 a year and avoid gift taxes.

Answer 5

recipients are not taxed on gifts this $30K might be suspect in regard to the Homeland Security office however, and you may have to prove where the money came from