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    tehanu's Avatar
    tehanu Posts: 3, Reputation: 1
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    #1

    Feb 11, 2007, 10:52 PM
    F1 OPT tax on overseas income/gifts
    Hi, I am sorry if this post appears twice, but I don't think my first one came through.

    Anyway: This is my fifth year as an F-1. I am currently on OPT, focusing mainly on producing creative work, which I have not been earning money for. My current employment gives me a small income, and my parents who live overseas, have generously agreed to support me in the States.

    But my parents thought it best to give the money to me through my US relatives, and so I get the money on a nearly daily, sometimes weekly basis. But I have read that gifts and overseas income also gets taxed in the States. This makes me a bit nervous, because I have not declared any such income on my 1040NR when my parents helped me out while I was studying. Does this money my parents give me (through my relatives in the US) count as income? Does my status as a non-resident, therefore filing 1040-NR, exempt me from that?

    Also, this year will be my sixth year in the States. Assuming that I will still be needing support from my family, do I have to declare that support in the 1040 when I file next year?

    Thank you.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Feb 12, 2007, 10:23 AM
    It does NOT count as income and is specifically exempt from U.S. taxes by tax treaty.

    Further, while gifts in the U.S. are taxed, the person GIVING the money pays the taxes, not the receiver of the gift.

    For 2007, you will be a resident alien, which means you are subject to all of the same taxes that U.S. citizens pay. However, the gift income is still not taxable to you.
    tehanu's Avatar
    tehanu Posts: 3, Reputation: 1
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    #3

    Feb 12, 2007, 06:45 PM
    Thanks, Atlanta Tax Expert.

    Should I tell my parents overseas that they will be paying taxes in the US then? Or will my relatives cover that? The situation is they give the money to relatives for safe-keeping, and then the money comes to me in small amounts at a time (I asked that because I did not want to spend all my money at once!). Now I am worried I put my relatives in a situation where they pay taxes just for holding my money from overseas...

    Thank you.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Feb 13, 2007, 10:54 AM
    No. Foreign nationals who live overseas are NOT subject to U.S. gift tax laws.
    s_abrar's Avatar
    s_abrar Posts: 2, Reputation: 1
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    #5

    Nov 19, 2008, 09:50 AM
    Will this be true for ANY amount and for ANY purpose? In my case my parents want to send me money to help me buy a house. I may use some of it and end up keeping the rest of it. In that case do I need to declare this on any Tax? Please note that this amount will be greater than $24,000. Is there an upper limit?
    s_abrar's Avatar
    s_abrar Posts: 2, Reputation: 1
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    #6

    Nov 19, 2008, 10:12 AM
    Sorry - you don't have to answer my question. I found the answer in this thread: "Overseas Cash Gift for Escrow? Tax implications?"
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #7

    Nov 19, 2008, 12:22 PM
    If your parents are NOT U.S. citizens, then no tax is due from anyone. However, you may have to explain from where the income came to the IRS.
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