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Foreign Gifts, Inheritances & Trusts (Form 3520)
Large gifts and inheritances from abroad, and interests in foreign trusts, are reported on Forms 3520 and 3520-A. The gift is usually not taxed, but missing the form is expensive.
What is included
- Form 3520 for gifts and bequests from foreign persons
- Form 3520 and 3520-A for foreign trusts and their U.S. owners and beneficiaries
- Documentation of the source of funds for banks and future audits
- Late-filing and reasonable-cause relief
The $100,000 rule
Gifts or bequests from a nonresident individual (counting related persons together) totaling more than $100,000 in a year are reported on Form 3520, due with your income tax return. The penalty can reach 25% of the gift.
Common questions
Do I pay tax on money my parents send me?
Generally no — U.S. gift tax is paid by the giver, and a foreign giver is usually outside it. The reporting obligation is yours.
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