Hi,

I am about to receive $120K gift from my father who is not a US Citizen and lives in a foreign country. My wife and I file joint tax return each year and we are both US Permanent Residents. The money will be transferred to our joint foreign bank account and then be transferred to our joint US bank account. Can we consider that each of us is receiving $60K and then don't file Form 3520? If this is the case, should my father send a statement (or two statements) indicating that the money is a gift to both of us in order to show to IRS in cased that we are audited? Should we file two Form TD F 90-22.1 (and two Form 3520 if necessary) with our tax return?

Thank you so much for your help.

IntlTax

My recommendation is to not try to avoid filing Form 3520. The form is simply an information return. No tax is due. However, the penalties can be 10% or more of the value of the gift if not filed when required to be filed. Why not err on the side of caution and file the form?

If you use your suggested approach (splitting the gift and not filing), it looks like you are trying to hide things from the IRS. If you get audited and the agent gets the sense that you have been trying to hide things, they will take a much harder look at your tax returns.

Five Rings

IntlTax's recommendation is entirely correct and appropriate.
Since gifts are never taxable to the beneficiary under US tax law you have no tax liability so why create the impression that you are trying to dodge somethig by not filing the3520?

giftsplit

Thank you for your answers. I actually thought the same but I read the blog of a tax attorney that if you file your tax return jointly with your wife, you don't need to report gift money under $200K. That was why I asked you the question. Again, thanks a lot for your help.

AtlantaTaxExpert

That what happens when attorneys who do not specialize in tax law gets involved in tax issues.

The gift tax is due from the giver of the gift. The amount of the gift money is irrelevent! No taxes are due from the recipient of the gift regardless of the amount of the gift.