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taxhelp99 · Sep 14, 2011, 08:45 AM

SUBJECT : re: FBAR a/c & Transferring money to native country from US
I am working in US & am not a citizen/permanent resident.

1. Is there any restrictions on how much money can I send to my parents who are not US residents & not US citizens living in the foreign country to their personal bank accounts.
From what I understood... IRS mandates declaration of amounts greater than 13,000 $ from an individual and 26,000 $ (from a couple) per year to be reported to IRS for tax(?gift)purposes.

2. If I sent 14,000 $ from my individual personal account & another 11,000 $ from a joint account(of mine & my spouse), totalling to 25,000 in a year - What is my obligation re: disclosure to IRS. towards those funds esp. If they are being transferred to an foreign bank account on my father's name. (neither I nor my spouse are joint a/c holders of that foreign bank account)

3. Do I need to report Tax returns if I have FB a/c that has an average total less than 10,000 $ in a year.

Appreciate your valuable guidance.
Thank you very much in advance

Sam

AtlantaTaxExpert · Sep 14, 2011, 02:17 PM

1) There are NO restrictions for transferring money to or from foreign bank accounts. However, such transfers MAY have to be reported to the IRS to explain their source and nature. NO taxes will be due on such transfer from the U.S. government. The GIFT TAX applies ONLY to U.S. citizen and resident aliens, and you stated that you are NEITHER, so it does NOT apply to you.

2) Based on the information provided, you will have NO tax obligations on these transfers. Further, since you are NOT a U.S. citizen or U.S. resident for tax purposes, the reporting of the transactions should NOT be required on Form 3520. Further, the transaction amounts fall BELOW the $100,000 threshold.

3) NO! That is the FBAR requirement which applies ONLY to U.S. citizens, grenn card holder, and resident aliens.

MukatA · Sep 15, 2011, 02:57 AM

The U.S. citizens and residents file gift tax returns. Nonresidents do not file gift tax returns. Even if you are not a permanent resident, you may be resident of U.S. if you complete Substantial Presence Test. If you do, you must declare any gift to an individual that is over $13,000 in a year.
U.S. citizens and residents must file FBAR if they meet the filing requirements.
You can send $13,000 to your mother and another $13,000 to your father. Your U.S. Tax Return: The U.S. Gift Tax

AtlantaTaxExpert · Sep 15, 2011, 10:56 AM

Mukat:

Good points! The OP MAY in fact be a resident alien and not realize it.

taxhelp99 · Sep 21, 2011, 05:43 AM

MUKATA & ATLANTA TAX EXPERT... THANK YOU BOTH SO VERY MUCH FOR YOUR PROMPT RESPONSES... Sorry could not check these responses sooner as I was unable to access

I will be considered a Resident alien (working on H1B for past 5 years, living in US continuously for past 4 yrs)

> Re: 26,000/year max. to EACH recipient(father, mother)- Does it need to mandatorily come out of OUR JOINT bank a/c(my spouse+mine) (OR) Is it okay even if it is sent out of my individual solo bank a/c.

> Am I obligated to disclose or file in any Form for IRS, IF I am NOT exceeding 26,000 max. limit / per recipient per year.

> IF I INTEND TO BUY PROPERTY IN MY NATIVE COUNTRY(like LAND OR HOUSE)AND I WOULD NEED TO SEND BIGGER AMOUNTS AT A TIME. WHAT WOULD BE THE TAX IMPLICATIONS &/or DECLARATIONS that I am responsible for ?

Once again Thank you so much for your guidance...

AtlantaTaxExpert · Sep 21, 2011, 07:26 AM

The source of the funds is irrelevant, just as long as the gift is made in your wife's name If you do not exceed the aggregate $52K, no reports/returns are required.

If you intend to buy property, then the transfer are NOT gifyts, just a means of transferring funds, which have NO tax implications. If the amount transferred exceed $100,000, you would have to submit Form 3520 to report the transfer amount. No tax; just an information return.

taxhelp99 · Sep 21, 2011, 11:05 AM

Thank you very much !

AtlantaTaxExpert · Sep 21, 2011, 11:53 AM

Glad to help!

Maratha · Aug 14, 2012, 05:49 PM

Hello,

On the same lines, I plan to transfer 36000 Euros from Germany to India and I am a permanent resident of US with Indian citizenship... I want to transfer the money as a gift for my parents who plan to buy real estate... what would be my tax obligations?

AtlantaTaxExpert · Aug 14, 2012, 06:07 PM

You wold have to FILE a gift tax return, but likely NOT have to pay any gift tax.

You would access the UNIFIED CREDIT to offset any calculated tax.

Strangler · Mar 13, 2013, 08:46 PM

AtlantaTaxExpert is incorrect. Since OP is on H1B for more than few years, it is highly likely that s/he would pass the Substantial Presence Test and would classify as Resident Alient (only for tax purposes) Please note - this is only for tax purposes and not for immigration purposes. So in a nutshell, yes you have to file FBAR. Research more.