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jayboot007 · Sep 18, 2009, 03:22 PM

Hi all,

I just received the Green card Sep, 2009 from my husband, before that I was a f21 student. I have been using credit card under my fiancé (husband now)'s name to buy stuffs and send them back to my sister overseas who has her own business (giftshop) for 3 years now.

My sister was my sponsor to get me USA visa and she did sent me money to pay off debt from credit card each month and also my living expense and tuition for $1,500-$2,000 a month, in the total amount of ~$15,000 each month.

I have questions:

Does it mean I have income? I don't know if I have to pay tax as it is kind like I got the money from my sponsor. I don't make any profit here in US but my sister did make profit in the other country.

Will my husband get in trouble? He make ~ $55,000-$60,000 a year. I am using his credit card but I pay for all using my checking account.

I using my sister's atm card from oversea to withdrawn the money from ATM in the US and deposite cash into my account. Month by month, I have not over $2,000 in my accoutn as most of the money was paid for credit cards.

I am afraid my hunsband or me will get in trouble with IRS, please advise.

We appreciate for you time and help, ^^

MukatA · Sep 18, 2009, 11:28 PM

There is a limit of $13,000 in 2008 and 2009, a U.S. person can give without filing gift tax return. So your sister may have gift tax return filing requirement.
Support provided by your sister, while you are in the U.S. is not a gift. Support means your living expenses, and tuition fee and other expenses. It does not include payment of previous loans.
In the U.S. the receiver of gift does to file gift tax return or do any reporting, except if the gift is from foreign sources.
Your U.S. Tax Return: The U.S. Gift Tax

jayboot007 · Sep 19, 2009, 02:44 PM

Very appreciate for your response and answer. It helps me a lot.

My sister is not a US permanent residence or citizen.

I am still wondering if it is not a gift so what should it be called. Do you think I have to take it seriously?

Thanks again... ^^

MukatA · Sep 19, 2009, 07:39 PM

If your sister who gave you gift is not a U.S. person, then she also does not have any gifts reporting requirements.

AtlantaTaxExpert · Sep 21, 2009, 11:17 AM

You may want to accumulate ALL of the money transfers done each year and show them on a spreadsheet, then consult with an international tax expert to determine how much each year was transferred between you and your sister.

I agree with MukatA that this is NOT income, but rather support. However, there IS a reporting requirement if the gift income from overseas exceeds $100,000, and your case MAY meet that $100K criteria.

jayboot007 · Sep 21, 2009, 02:08 PM

Thanksss so much, MukatA and AtlantaTextExpert for your times answering my question.

Do you know what is the outcome from reporting? Will I get in trouble if she is still asking my to buy stuffs for her giftshops..?

Many many thanksssss

AtlantaTaxExpert · Sep 22, 2009, 11:40 AM

I think she has NOTHING to worry about. If the amount is over $100K, just report it on Form 3520.

jayboot007 · Oct 10, 2009, 01:33 PM

many thanks, AtlantaTaxExpert. I just came back from visiting my country.. ^^

Five Rings · Oct 11, 2009, 10:32 AM

The support for this lady is one thing; that's at the most $24,000. A gift as all seem to agree.

The other thing is this lady acting as a purchasing agent for her sisiter. It appears it is merely swapping money. She buys and the sister reimburses or she uses the sisters money available from the ATM.

Further, the sister has no exposure to US tax since, under treaty, jayboot007 does not constitute a permanent establishment of the sister's company:
Art. IV
4. Notwithstanding the foregoing provisions of this Article, the term "permanent establishment" shall be deemed not to include:
d) the maintenance of a fixed place of business solely for the purpose of purchasing
Goods or merchandise, or of collecting information, for the enterprise.