Do I report a foreign gift on Form 3520, and when does a gift I make need Form 709?

Start with the direction. If you receive money or property from a foreign person, you, the U.S. recipient, file Form 3520. If you give money to someone, you, the donor, file Form 709. If parents in China give away U.S. real estate, the parents file Form 709-NA. When a client says "foreign gift," the first thing we ask is which way the money moved.

Then three things matter: who the donor is (a person, a company or a trust), how much was given in the year, and where the money or property is. The chart below brings the common cases together.

Start with the direction (received or given), then who the donor is, how much, and where the money or property is.

① You received money or property: the U.S. recipient files

Who gave it	When you file	What you file
A foreign individual or foreign estate (including parents in China or a nonresident spouse)	Gifts from that person and anyone related to them (for example, both parents) total more than $100,000 in the year	Form 3520 Part IV; list each gift over $5,000; reporting only, no tax
A foreign corporation or partnership	More than $20,573 in total (2026)	Form 3520, listing every gift; the IRS may treat it as income
A distribution from a foreign trust	No threshold	Form 3520 Part III
Tuition paid directly to a school or medical costs paid directly to a provider	—	Not a gift; nothing to file

② You gave money or property: the donor files

Who you are	When you file	What you file
U.S. citizen or tax resident	More than $19,000 to one person this year, more than $194,000 to a non-citizen spouse, or electing to split gifts	Form 709; usually just uses part of the lifetime exemption ($15,000,000 in 2026), no tax due
U.S. citizen or tax resident	Tuition paid directly to a school or medical costs paid directly to a provider	No Form 709
Nonresident alien	U.S. real estate or other U.S.-situs tangible property above the annual exclusion	Form 709-NA; no lifetime exemption
Nonresident alien	Cash from a U.S. bank account above the annual exclusion	The IRS hasn't said clearly whether it is U.S.-situs; talk to a CPA before the transfer
Nonresident alien	Intangibles such as U.S. stock, or a wire from a foreign account	Generally nothing to file

If gifts or bequests you receive from foreign individuals or foreign estates total more than $100,000 in a year, you report them in Part IV of Form 3520. That threshold isn't adjusted for inflation. Form 3520 is an information return. It doesn't create tax by itself, but not filing it carries penalties.

The rules people most often get wrong:

• It's the annual total, not each transfer. Parents who send money in several smaller wires still trigger the filing once the total passes $100,000. Above the threshold, each gift over $5,000 is listed separately.
• Related donors are combined. If you know or have reason to know the donors are related (a father and a mother, say), or one is just acting for the other, their gifts are added together.
• Each recipient is tested separately. What the parents give you, your spouse and your children is counted per recipient, and each person checks the threshold on their own.
• Non-cash gifts (real estate, stock, business interests) are reported at fair market value, with a description of the property.

Deadlines and mailing:

• Form 3520 for tax year 2026 is due April 15, 2027, or October 15, 2027 if you extend your individual return. U.S. citizens and residents living abroad get until June 15 with a statement attached.
• Form 3520 is not mailed with your Form 1040. It goes separately to the IRS in Ogden, Utah, and a form missing required attachments isn't treated as timely.
• If the money sits in a foreign account, you may also need to file an FBAR (FinCEN 114) and Form 8938. Those are separate obligations from Form 3520.

"Gifts" from a foreign corporation or partnership must be reported once they total more than $20,573 in 2026 ($20,116 in 2025), and every gift is listed with the name of the company. The IRS can also recharacterize these payments as income.

So before anything is filed, we pin down whether the wires came from the parents' personal accounts or from the parents' business. The two thresholds differ roughly fivefold, and they go on different lines (line 54 for foreign individuals, line 55 for foreign corporations and partnerships).

Distributions from a foreign trust, including loans from the trust and rent-free use of trust property, have no dollar threshold. They go in Part III of Form 3520, and the penalties are steeper.

When parents send money for a down payment, you, the recipient, report it on Form 3520. Both parents' gifts are combined, and if the total for the year passes $100,000 you file, even if it arrived in pieces. Tuition the parents pay directly to a U.S. school and medical bills they pay directly to a provider aren't gifts.

• Down payment: the parents don't owe U.S. gift tax, as long as what they give isn't U.S.-situs property. You report as the recipient on Form 3520 and owe no tax.
• Tuition and medical bills: only payments made directly to the school or the provider are excluded. If the money comes to you first and you pay the bill, it's generally treated as an ordinary gift.
• Loans: a real loan isn't a gift. It helps to have a written note, a stated interest rate and a repayment schedule, and to actually make the payments. Without paperwork, or with no repayment ever, the money risks being treated as a gift. Loans also raise questions about how interest is figured and whether interest paid abroad needs withholding, so they need a case-by-case look.
• Whether the money stays in China or comes to the U.S. doesn't change the Form 3520 analysis. If it sits in a foreign account in your name, look at the FBAR and Form 8938 as well.

A U.S. citizen or tax resident who gives more than $19,000 to one person in 2026 files Form 709. Filing doesn't mean paying: the excess first uses up part of your lifetime exemption, which is $15,000,000 in 2026, and until that's exhausted there's generally no gift tax.

• Annual exclusion: $19,000 per recipient per year (the same in 2026 as in 2025). Each recipient gets their own $19,000.
• Lifetime exemption: $15,000,000 in 2026 ($13,990,000 in 2025). That's the figure set by the One Big Beautiful Bill Act (OBBBA). It has no expiration date and is indexed for inflation starting in 2027. Lifetime gifts and your estate share the same exemption.
• A spouse who isn't a U.S. citizen: you can give up to $194,000 tax-free in 2026 ($190,000 in 2025). Above that, the unlimited marital deduction doesn't apply and you file Form 709.
• Gift splitting: if both spouses consent, a gift by one can be treated as made half by each, so each uses their own annual exclusion. You must be married at the time of the gift, and neither spouse can be a nonresident alien. The election covers every gift to third parties that year, and electing to split means filing Form 709 even when the amounts are small. Usually each spouse files a return.
• Tuition and medical costs paid directly: tuition paid straight to a school and medical costs paid straight to a provider are unlimited, don't use the annual exclusion and don't require Form 709. Books, room and board, and reimbursed medical bills don't qualify.
• Deadline: Form 709 for 2026 gifts is due April 15, 2027. Extending your individual return (Form 4868) automatically extends Form 709. Without one, use Form 8892. An extension to file is not an extension to pay.

A nonresident alien who gives U.S. real estate or other U.S.-situs tangible property above the annual exclusion files Form 709-NA personally. The form is new starting with tax year 2024. Nonresidents get no lifetime exemption, China isn't on the list of U.S. gift tax treaty countries, and the top gift tax rate is 40%.

• The 2026 annual exclusions still apply to nonresidents: $19,000 per recipient and $194,000 for a non-citizen spouse.
• Gifts of intangible property only, such as U.S. stock, generally don't need to be reported (with an exception for certain U.S. expatriates).
• Form 709-NA is due April 15 of the following year and can be extended. It can be mailed to the IRS in Kansas City, Missouri, or e-filed.
• A common trap: parents buy a U.S. home in their own names and deed it to a child a few years later, assuming family transfers don't count. U.S. real estate is U.S.-situs property, so the transfer itself is a gift and can trigger gift tax.
• For cash gifts, including money in a U.S. bank account, checks or wire transfers, the IRS instructions don't spell out whether they count as U.S.-situs property. Talk to a CPA about how to structure the transfer before the money moves.

If you are a U.S. tax resident and gifts from your nonresident-alien husband total more than $100,000 in a year, you file Form 3520 Part IV on your own. There is no exception between spouses, and it makes no difference that the money comes from a U.S. bank account (for example, HSBC in the U.S.). Whether your husband owes U.S. gift tax depends on the amount and where the money comes from.

Your side: Form 3520 (reporting only, no tax)

• The donor's status decides it. What counts is whether the person giving is a nonresident alien, not which country or account the money comes from. More than $100,000 from the same donor in the year means you file.
• No exception for spouses. The Form 3520 instructions have no spousal exception. If your husband is a nonresident alien, what he sends you is a foreign gift.
• How to report. In Part IV, enter the amount and describe it (for example, "Cash gift from a foreign individual"). The recipient owes no income tax on it.
• Due date and filing. Same due date as your Form 1040 (April 15, or October 15 with an extension). Form 3520 is mailed on its own to the IRS in Ogden, not e-filed with the 1040.
• Penalty. 5% of the unreported amount for each month late, up to 25%. On $100,000 or more, that adds up quickly, so file on time.

Your husband's side: U.S. gift tax

• Because you are not a U.S. citizen (for example, still waiting for a green card), the unlimited marital deduction doesn't apply. Only the annual exclusion for a non-citizen spouse does: $190,000 in 2025, $194,000 in 2026.
• A nonresident alien pays gift tax only on U.S.-situs property. Whether cash from a U.S. bank account counts is a grey area: estate tax has a bank-deposit exception, gift tax has no clear counterpart, and the IRS leans toward treating it as U.S.-situs.
• Up to $194,000 in the year (2026): within the annual exclusion, no gift tax and nothing for him to file.
• Above $194,000: he may have to file Form 709-NA as a nonresident on the excess. Nonresidents have no $15,000,000 lifetime exemption, so tax may actually be due.
• Planning. Send large amounts straight from his foreign account (for example, in Hong Kong or mainland China) to you. A nonresident's gift of foreign-situs intangibles is outside U.S. gift tax and far cleaner than a transfer from a U.S. account.

Other things to confirm

• Is he really a nonresident? Check his green card status and his days under the Substantial Presence Test. If he is in fact a U.S. tax resident, this is a gift between U.S. persons and no Form 3520 is needed.
• The §6013(g) election. If you elect under §6013(g) to file jointly, he is treated as a resident for income tax, and it is generally understood that Form 3520 is no longer needed. The cost: his worldwide income goes on the U.S. return, year after year. It usually only pays when his foreign income is modest.
• Joint accounts. If you are added to his account, or the money only moves into a joint account, when the gift is complete and for how much depends on the facts; generally it is complete when the recipient actually draws on it.
• Loan or gift? A loan or paying shared expenses is outside Form 3520, but keep a written loan agreement or similar evidence, or the IRS will generally treat it as a gift.
• After the green card. Your green card doesn't change your residency or your Form 3520 duty. If he later gets a green card too, transfers from then on are no longer foreign gifts.

For the foreign gift section (Part IV), a late or missing report costs 5% of the gift for each month, up to 25%. No penalty applies if the failure was due to reasonable cause and not willful neglect. On October 24, 2024, the IRS announced it would no longer automatically assess penalties when taxpayers voluntarily file a late Part IV reporting foreign gifts and bequests. The penalty itself was not repealed.

Read the scope of that change carefully:

• It covers voluntary late filings only: the IRS hasn't contacted you about these forms, and you aren't under examination or investigation. Once the IRS has written or opened an exam, it isn't voluntary, and penalties can still be assessed in an exam.
• The trust parts follow a different rule: for the trust sections of Form 3520 (Parts I–III) and Form 3520-A, the IRS reviews the attached reasonable cause statement before deciding whether to assess a penalty. The penalty for an unreported foreign trust distribution is the greater of $10,000 or 35% of the unreported amount.
• The reasonable cause statement still matters: it should lay out the facts and the timeline and include an "Under penalties of perjury" declaration. A foreign law that bars disclosure, or trust terms that restrict it, isn't reasonable cause.
• Penalties already assessed aren't refunded under the streamlined procedures.

Two questions decide the path: has the IRS already contacted you about these forms, and besides Form 3520, did you also leave income off your returns?

Read from the top; follow the first row that fits.

Your situation	Path	What to do
The IRS has already contacted you about these forms, or you are under examination or investigation	Not a voluntary filing	Talk to a CPA and respond to the IRS letter
The failure was willful	Voluntary Disclosure Practice (VDP)	Get advice first
Only Form 3520 was missed; no income was left out	DIIRSP	File Form 3520 on its own under its instructions, with a reasonable cause statement
Income was also left out (foreign interest, investment income), and in one of the last 3 years you lived abroad (330 days outside the U.S., no U.S. abode)	SFOP	3 years of returns and 6 years of FBARs with Form 14653; no penalty
Income was also left out and you didn't live abroad	SDOP	3 years of amended returns and 6 years of FBARs with Form 14654; 5% penalty on the unreported foreign assets

• Situation A: Only Form 3520 was missed, and no income was left out. Use the Delinquent International Information Return Submission Procedures (DIIRSP). File Form 3520 on its own under its instructions, not attached to a Form 1040-X, with a reasonable cause statement and "Reasonable Cause Statement attached" written at the top of the first page. Penalty relief isn't guaranteed, but the IRS reviews the statement first.
• Situation B: Income was missed too, and it wasn't willful. Think interest or wealth-product income from accounts in China. If you don't meet the foreign residency test and filed returns for each of the last 3 years, look at the Streamlined Domestic Offshore Procedures (SDOP): 3 years of amended returns, 6 years of FBARs and a 5% miscellaneous offshore penalty based on the highest year-end balance of the unreported assets, with no separate information return, FBAR or accuracy penalties. If you meet the foreign residency test, the Streamlined Foreign Offshore Procedures (SFOP) carry no penalty.
• Situation C: The IRS has already written, or the failure was willful. It's no longer voluntary. Don't send a reply or late forms on your own. Have a CPA review the letter first and decide how to respond. For willful cases, there's a separate Voluntary Disclosure Practice (VDP).
• Gifts still to come? Plan ahead. Keep a record of each transfer and each donor by year and by recipient, have parents pay tuition directly to the school, and if it's a loan, put it in writing and repay on schedule.