A relative of mine wants to transfer $100K to his daughter in US. Would either be taxed in US for this?

Question

My relative is an Indian resident and his daughter is US resident. He sold his house in India and wants to give US $100K to his daughter in US. Would either of them be taxed in US. Since he is not a US resident, would he be liable to pay tax in US? Thanks!

Answer 1

The daughter will not be taxed on the gift. She will not pay income tax or gift tax.

The father will not be taxed by the US. He is not subject to US income tax or gift tax.

He may be taxed by India, either a capital gains tax or a gift tax, ask in the India tax answers section.

Transfers of this size do require that a form be filed with the US. The recipient will file Form 3520, due on the date her tax return is due, but mailed separately. Failure to file this form can result in substantial penalty.

Link to instructions for Form 3520:

http://www.irs.gov/instructions/i3520/ch01.html#d0e135

Answer 2

Well, you certainly have a range of answers, most of them wrong. Ninasgram, as usual, has the right answer.

The daughter would not be taxed - the recipient of a gift does not owe tax on the gift. Assuming that the father is not a US citizen or resident, he isn't subject to US tax, so he doesn't have to worry about a gift tax return or gift tax.

Answer 3

She wouldn't be taxed, the giver is taxed on gifts over the allowed amount. I believe the allowed amount for 2007 is $11,000.

Answer 4

there will be no tax, but bank will certainly notify IRS that daughter received the money

Answer 5

You can give up to 10k without paying taxes. I think she would be taxed on 90k. I don't think he would. Contact a certified public accountant to be sure.

(LOL!!, I wish someone would send me 100k!!)
Good luck

Answer 6

She would surely be taxed, but not him being that he is not a US resident, he wouldn't be subject to taxes.

Answer 7

yes