bostonianinmo
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Wow, what a fascinating array of WRONG answers! And a couple of correct ones!
Bona-fide gifts are generally not taxed to the recipient. There MIGHT be a tax liability on the part of the donor depending upon the circumstances and how much of their lifetime and annual gift tax exclusions they've used.
Making a large deposit like that may well give rise to questions and your bank may require you to file some declarations regarding the source of the funds. Be straight with your answers and there won't be any problems. The IRS might want to see proof that the funds are a gift -- Non-resident Aliens are required to file gift tax returns for gifts to US Citizens of property in the US and that would satisfy the IRS that the gift was legitimate.
If the donor was require to file a gift tax return and pay tax and failed to do so, you might have to pay the gift tax yourself. |
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skip
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If it is genuinely a gift, there is no tax bill for the recipient. You just have to prove it really is a gift.
Those who talk about the $10,000 and $11,000 limits are mis-informed. Those limits relate to the giver - the amount the giver can give each recipient before the giver becomes liable for Gift Tax.
Get to an accountant and lawyer. They will tell you if you have adequate proof that the gift is indeed that.
Beware, though. Anyone who "helps out" someone from overseas by accepting a gift which really isn't runs a high risk of going to prison for several years. This may not be your situation, but I thought I would mention it anyway. |
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open4one
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A bona fide gift is not taxable to the recipient, as it is not considered income.
There's probably no problem here for you, other than making sure they send you a letter stating that they are giving you this gift. It is possible that someone (the IRS or a bank) will want to know that it isn't income, or any kind of illegitimate transfer.
If they are not US citizens, they don't have any US issues, but if they are, this gift could cause problems. There's a maximum amount that one person can give to one person without the excess being deducted from their estate tax credit, so a Gift Tax Return will have to be filed. They might want to see if there are similar problems with estates where they are.
edit: The preceding answers are wrong. There are no tax consequences to the recipient of a gift. Just be sure you can prove it was a gift (the letter I mentioned).
edit again: No, the limit is not $10,000, (I think it's up to 11,000 now) and even if it is over that, NO TAX IS DUE. Excess gifts merely reduce the estate tax exclusion of the one giving it, they do not have any impact whatsoever on the recipient.
Yes, I know tax laws are confusing. That's why I'm for doing away with them completely. Don't make it worse by posting answers when you don't know the subject. |
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Answer King
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No, you won't have to pay tax because it is not income. Your relative will have to file a gift tax return if he is a US citizen. Even if he is a citizen, he may not owe any tax. I assume the money is not cash, a wire transfer or check.
Just make sure it really is a gift.
From IRS:
The person who receives your gift or your estate generally will not have to pay any gift tax or estate tax because of it. In addition, that person will not have to pay income tax on the value of the gift or inheritance received. |
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gimp3836@sbcglobal.net
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I can tell you one thing with confidence. The recipient is not the one who has the tax issue. Beyond that I would recommend you reread "open4one" answer, then contact a CPA or tax attorney to confirm his position. Don't forget, a State may want a bite of that money even if the Feds don't. |
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Donald S
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FOR THE CORRECT ADVICE CALL 1 800 829 1040. IRS' INFO LINE AND ASK THEM YOUR QUESTION.
Don |
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brenden b
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The recipient of a gift does not pay the tax on said gift. The person giving the gift is the one who is responsible for the tax. as long as you can prove it is a gift you dont have to worry about taxes. |
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goldenboyblue
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It's the giver that usually pays gift tax.
In your case the giver may have to declare the gift to the customs dept of his/her country and pay the appropriate taxes there.
In America we usually have to tell the post office when sending gifts to other countries and they act as the agent for reporting/collecting for the customs dept.
As for for what others said about depositing under $10000 in a bank that applies to cash, not checks. |
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my avatar's hot!
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Anything over $10,000 is subject to IRS scrutiny, and there are forms you have to fill out for them regarding the money transfer. This came about to reduce the money laundering the drug lords were doing in the 70's. If it is a gift it falls under a different tax structure. They WILL audit you and slap you silly for income tax if it smells like anything but a gift... ask anyone who's run into the IRS over sudden money appearing out of thin air!
If it is an inheritance there are different rules that apply. Your best bet is to contact a tax attorney (not an accountant, an attorney) and have him look at the transaction to show you how to do it legally. |
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Surveyor
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Unless your relative pays you in cash and you bury it in the back yard, you will have to give the IRS about half of it. |
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Enigma
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mary mary...with that kind of money i think i would go to a financial advisor and let them tell you
i bet there are some loopholes you could use
like the purchase of a home or
an IRA or a roth IRA
there are tax shelters out there you just got to
find the right one for your situation |
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eejonesaux
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hi Mary,,,, look ,,, put the money in a bank overseas.... that way you dont have to pay U S Taxes on it...
Tell your relative this.... open a savings account and put it in there,,, draw the interest.. only... never touch the principal... that way you dont have to report it as income here....
good luck |
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Sara
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The government has raised the "qualifying gift" income to $11000. so as long as you're under that amount, you dont have to pay tax but anything over that from anywhere in the world you have to show on your taxes. it would probably be considered as foreign income but yea welcome to america where they want taxes on anything and everything they can get. |
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Red
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Make sure that you do not deposit anything $10,000 or higher into your bank account in one banking day. Also, if you own multiple accounts with the same bank and make deposits (even at separate branches) on the same day that total $10,000 or more, they will most likely report it. This includes wire transfers. Also, do not purchase monetary instruments such as money orders, cashiers checks, or traveler's checks.
I would also look into HOW the money that you are going to receive is going to be handled on paper. If they are doing it through transfer of estate or as a gift through a bond or something that you will have to cash, you might want to ask an Enrolled Agent what the federal reporting guidelines are. Sometimes paying the tax is much less than any penalty you would receive for trying to hide the money. Not to mention that money laundering is a federal offense. |
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williamh772
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It used to be that a US citizen could receive a gift of up to $10,000 without having to pay income tax on it. I believe that figure has been revised upward somewhat, but I do not know the precise amount--that you will to consult with a tax specialist about. In fact, you should present these questions to a tax specialist.
And the $10,000 rule (reported to the IRS) pertains to cash deposits or withdrawals--then a card has to be filled out and sent to the IRS (but even this rule is subject to where the bank is located). |
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bam
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Is it a long-lost cousin from Nigeria? If so, you will have to pay taxes through the Federal Department of Nigerian Money Transfers. As it happens, I work for that department. All you have to do is give me your credit card and PIN numbers, and you will be all set! |
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muncie birder
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They can give you $11,000 a year tax free. Next year it increases to $12,000--maybe this year. The IRS site is never up to date on their information. |
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Blue Eyes
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Yes you will. I'd bury it in the back yard and limit your spending so know one catches you. hehehe |
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Artguer
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you can always open a Swiss bank account and put the money there. You can declare a portion of it as gift and depending how much RRSP you can invest you can put a portion in there too. Otherwise you have to pay tax on it. |
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Alex
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There is a limit on gifts at 10,000 dollars per year if it is in the US without taxes. I am not sure how it applies to outside the US. I would guess it is the same.
Any transaction that big you should see an attorney on. It is too much to have suprises. |
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Chris H
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$10,000 is the maximum you can receive from an individual in a calendar year and still have it considered untaxable. Any thing over $10k has to be reported, and a gift tax paid. Consult your accountant or tax ottorney for more advice.
If you are married and/or have kids, this is a per person limit - so your relative can give you $10k, your wife $10k, your kids $10k, etc.
I would work something out with your relative to give you the money in $10k increments over the next few years. If they put it in an interest bearing account, and pay you from that, you could conceivably make a little extra money as well. |
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Nate
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You will have to pay taxes on 100,000. Have them put it into an offshore account you own. ie in the Caymens. |
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Allison S
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Yes and Yes. It's considered income, however I believe there is a $10,000 cap before you have to pay the tax on it. Check with your State regulations too. |
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staxi
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yes-
any income you make while you live in us, you have to pay taxes on - not only federal but also state and some other taxes apply depending on where you live.
sorry wish it wasn't so, but it is |
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Joe S
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Yes, you will be taxed if you bring it to the U.S. If the country the money is coming from is a place you may visit a few times over the next few years, leave it in a stable, trusted bank and use the money for all of your travel and vacation expenses. Also, check out the county's inheiritence laws as you may have to pay taxes there if you leave it.
I have had relatives in another country leave me money and instead of losing money on the coversion and taxes, I do the above. |
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ed
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A relative can give you $10,000.00 per year in the US, without a tax liability. It should be set up in that manner, in the foreign country, like a trust, from which you could draw. |
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wildand5150
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Yes, if you put anything over 10k in the bank they will report the account to the IRS. The only thing you could do is keep the cash or open numerous accounts with up to 9,999.00 Or you can pay the taxes like you are legally obligated to. |
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curiously strong
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yes they can and yes you will there is a minimum amount you can receive without paying taxes...go to the i.r.s. page and you should be able to find the info |
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fat_albert_999
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Yes they can give you the money and yes you will have to pay tax. Gift tax is very high, something like 50%. You dont have to report gifts of $10,000 or less. |
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lin
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What country are you talking about? Don't answer, but prepared to. |
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kustomflames@verizon.net
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Yes they can give it to you but be aware of the authorities looking into it, better to get it in increments of less then 10k at a time |
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