Gifts from a Foreign Person/Non-Resident Alien
QUESTION: I received a gift ($50,000) from a relative in another country. It’s the only income I received in 2015. Do I need to file a tax return?
ANSWER: You did not explain the reason for these gifts, but I would point out that if the purpose is to pay tuition, higher educational expenses, or qualified medical expenses for a person residing in the US, these are regarded somewhat differently by the IRS.
The short answer is NO, there’s no need to report it. However, if you received more than $100K from a non-US person. You have to report it, and unless it is taxable income – it is a gift. Taxable income is reported on the form 1040; gifts are reported on the form 3520.
This instructions on form 3520 makes this requirement clear enough, see the quote below.
You must file form 3520 if: You are a U.S. person who, during the current tax year, received either: a. More than $100,000 from a nonresident alien individual or a foreign estate (including foreign persons related to that nonresident alien individual or foreign estate) that you treated as gifts or bequests; or b. More than $15,358 from foreign corporations or foreign partnerships (including foreign persons related to such foreign corporations or foreign partnerships) that you treated as gifts. Since you received $50k from an individual in a foreign person, option (a) applies because the gift was under $100K, thus you have no filing requirement.
***Disclaimer: I am a tax accountant and a CPA licensed in Massachusetts , but I am not your accountant or advocate (Unless you have signed up to my services). This communication is not intended as tax advice, and no tax accountant -client relationship results**