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sissypinar2013 · May 5, 2013, 06:54 AM

My 9-year old daughter is about to receive a substantial gift of money (well over a $150,000.00) from one of my relatives in Turkey. I am now a US citizen. My question is this: Since my daughter is 9-years old and does not file an income tax form yet, do my husband and I have to include some kind of report when we file? Will my daughter have to pay some sort of tax for this gift? Presently my daughter has a bank savings account in which we deposit money for her future education. Should the money be transferred directly to her account or is there some US law that will not allow children to receive transfer of funds?

AtlantaTaxExpert · May 5, 2013, 07:04 AM

Form 3520 will need to be filed to report the transfer, but there are NO transfer taxes, and since the gift is sourced from a non-U.S. citizen, there are no gift taxes.

sissypinar2013 · May 5, 2013, 11:06 AM

Originally Posted by AtlantaTaxExpert

Form 3520 will need to be filed to report the transfer, but there are NO transfer taxes, and since the gift is sourced from a non-U.S. citizen, there are no gift taxes

Little confused. I have looked at form 3520 and it asks for information in Part 1 to identify person or persons filing IRS 1040... that would be my husband and me jointly. But the gift is coming straight to my daughter's saving account where it will be used for education and whatever else she might need. She of course is 9 and will not be filing income tax returns... therefore, what do we need to do?

We really appreciate your advice and feedback.

AtlantaTaxExpert · May 5, 2013, 11:15 AM

List your daughter's name and SSN as the RECIPIENT of the gift.

Even though she is NOT filing the tax return (though she COULD if she earned money; child actors and models file tax return AND pay taxes on their earnings every year, just like adults), she IS the recipient and you need to make that clear to the IRS on Form 3520.

sissypinar2013 · May 5, 2013, 02:09 PM

Originally Posted by AtlantaTaxExpert

List your daughter's name and SSN as the RECIPIENT of the gift.

Even though she is NOT filing the tax return (though she COULD if she earned money; child actors and models file tax return AND pay taxes on their earnings every year, just like adults), she IS the recipient and you need to make that clear to the IRS on Form 3520.

Yes... never thought of that! Thank you for this info. Just didn't want to do something or not do something that would be wrong.

AtlantaTaxExpert · May 5, 2013, 02:28 PM

If you are uncertain on how to complete and file this form, then get professional tax help to file it.