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Tax Law (Questions About Taxes)/U.S. Gift tax & Estate Tax

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Question
If my parents, who are not U.S. Citizens, nor U.S. Residents,
decide to gift me money.
And their money, has nothing to do with U.S. Business or
Trade.
Thus, they should not be, U.S. GIFT TAX NOR U.S. ESTATE TAX, LIABLE,as the donors!!
I however, am a U.S. Citizen. But would also be, the Beneficiary of the gift.
Therefore, isn't the gift from my non U.S. Citizen parents, a U.S. Gift tax free & I, as the beneficiary, have nothing to pay either?
And not even have to file a Return on receiving the gift?
Nor pay Income Tax on receiving the gift?

Answer
Hi Dean,

If the donor is a “foreign person” (as you have mentioned), cash gifts from parents are not taxable, however if the gift is non-cash, it may be taxable if it is U.S.-based property.

A gift from a “foreign person” does need to be disclosed on the Form 3520 to the IRS if it exceeds certain thresholds.

Please review this Foreign Gift Tax article that I have written that explains the "ins" and "outs" of gifts from a "foreign person".

If you have additional questions about reading the article, please don't hesitate to let me know. If you find the article of value, please click on the "Google Plus One" icon.

Best regards,
Randall

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Randall Brody, EA, MBA, CCP

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Tax Samaritan is a boutique firm specializing in the preparation of taxes and the resolution of tax problems for Americans living abroad, as well as the unique tax issues that apply to taxpayers that are gamblers, teachers, nurses and military.

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