My relatives outside of U.S. want to wire some money to me. Do I need to pay "income" tax on the wired amount?

Question

Is there a limit before I'm liable for "income" tax?

Answer 1

No, assuming that this is a bona-fide gift. Gifts are never taxable to the recipient, even when the source is foreign.

If your relatives are US citizens or residents they may have to file a Gift Tax return depending upon the amount of the gift. If they are not US citizens or residents they cannot be compelled to file a US Gift Tax return.

Depending upon the amount you may have to file an informational return on Form 3520. I believe the personal gift amount is $100,000 for the 3520 filing. No taxes will be due if it is a bona-fide gift, however if a 3520 is required and is not filed there are substantial penalties for failure to file.

If the source of the "gift" is actually a foreign trust, some or all of the money may be taxable, depending upon the facts of the case. The filing requirement for the Form 3520 if the source is a trust is $5,000 if memory serves correctly.

Answer 2

Hirebook is right. You are allowed up to 12,000 this year as a gift from a relative. How do I know this because I have been going through the same thing for the past 3 yrs. Every year the amount gets higher. If you don't believe this than call the IRS and ask them. Than you will find the right answer.

Answer 3

No, assuming the money is a gift and not payment for work you've done for them, the money isn't taxable income to you no matter how big the amount is.

Answer 4

No; tell them to wire all the money they want. If they want to get rid of even more tell them to wire some to me, too.

Answer 5

I say no. You are allowed a gift of $12000.

Answer 6

No