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    deejay_sharp's Avatar
    deejay_sharp Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Jun 4, 2011, 07:07 PM
    Should I report taxes for funds transferred to my bank account?
    My son is operating a tailoring business in China and he has a lot of funds (about $500 USD per day) deposited into my US bank account daily, and then he wires them to his bank in China. I have nothing to do with these transfers, and just letting him use my bank account. Do I have to file these on my income tax report? If not, do I need to disclose these activities to the IRS or the US government?

    Your help will be much appreciated, thank you!
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Jun 4, 2011, 07:15 PM

    If the funds are not your income, then you don't have to report them.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
    Expert
    		  
    #3

    Jun 4, 2011, 07:18 PM

    I am sorry,

    He has a business in China? So from China he puts 500 dollars a day in to your account,
    Then he moves that money from the US to China

    This sort of activity is going to raise red flags everywhere, for possible money laundering. If he is in China, why does he have to put the money into your account first.

    Esp with the poor US dollar value
    deejay_sharp's Avatar
    deejay_sharp Posts: 3, Reputation: 1
    New Member
    		  
    #4

    Jun 4, 2011, 09:35 PM
    Thanks for your help so far.

    Let me explain a bit: my son is a US citizen, and he processes credit card transactions in USD so that he has to get the funds to my bank account, and then transfer to his company in China for operational costs.

    Is this legal or.. Do I have to report these income?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Jun 7, 2011, 08:33 AM
    You do NOT report transfers as income. Your son DOES have to report his net profits on the tax return for his business, be it a corporate return, partnership or sole proprietorship.

    If the transfers are more than $10,000, he may have to report the transfer, but no tax will be due.
    deejay_sharp's Avatar
    deejay_sharp Posts: 3, Reputation: 1
    New Member
    		  
    #6

    Jun 7, 2011, 10:30 AM
    Thanks, AtlantaTaxExpert. My son is already filing income taxes in China. Does he need to file in the US as well? He said that under 80k USD of income per year (if working abroad exclusively) makes him exempt from filing, correct? Thanks in advance for your help.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #7

    Jun 7, 2011, 11:15 AM
    He probably will not have to PAY U.S. income taxes due to the Foreign Earned Income Exclusion, but he MUST file a U.S. tax return annually.

    If he needs professional help filing such a return, have him email me at [email protected] or [email protected].
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