Are you reporting gifts to the IRS?

In this short video, Andrew J. Landin, Managing Director of Expat US Tax explains the basics of reporting gifts from non-Americans to the IRS, why you have to report and what the tax implications might be.

Do they need to be included on my US tax return?

A very, very common question that we have within the middle east is where we have one person in the family who is American and another person in the family who is non-American. Maybe something like a wedding happens and the Saudi Arabian part of the family gives money to an American to pay the wedding costs. When this happens the gift isn’t taxable, but it’s reportable. It’s not done as part of your individual tax returns; it’s done on some separate forms which go to a very different place in the IRS that deals with foreign tax compliance, for the most part.

These gifts, as I mentioned, are not taxable. Currently, the threshold for reporting is $100,000. If you do these tax filings and you tell the IRS about the gift, all is good. If they found out that you received the gift, but didn’t do the filing there are potential penalties in place, like, a lot of foreign related issues that happen on the US tax returns.


 



Share with Expats   

Comments

    Post has no comments.
Twitter
Tell us what you think...
Captcha Image