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    Aug 28 12

    Reporting a Gift or Inheritance from Foreign Sources: The IRS Wants to Know!

    Newport Beach Law Firm

    What
    about foreign gifts and inheritances? These rules aren’t as well publicized but
    the stakes are huge.

    Have you received a gift or
    inheritance from a loved one living in a different country? The IRS wants to
    know about it, and failing to notify them could cost you. As pointed out in an
    article at Forbes, “Beware IRS Reporting Of Foreign Gifts Too,”
    you will need to file an IRS Form 3520, Annual
    Return to Report Transactions with Foreign Trusts and Receipt of Certain
    Foreign Gifts
    , if you receive:

    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

    More than $14,375 from
    foreign corporations or foreign partnerships (including foreign persons related
    to such foreign corporations or foreign partnerships) that you treated as
    gifts.

    You are required to report these
    bequests on Form 3520 when you actually or constructively receive them. Late
    reporting penalties are high – five percent of the gift’s value for each month
    the gift is not reported, up to 25 percent of the total value.

    Remember that income from abroad
    is taxable, and the IRS is looking at foreign accounts ever more closely under
    the Foreign
    Account Tax Compliance Act
    (FATCA). To learn more, read the Forbes article, “How
    to Report Foreign Gifts and Bequests to IRS
    .” Better yet, consult with Meier Law Firm for counsel on your individual circumstance.

    Reference: Forbes
    (August 13, 2012) “Beware IRS Reporting Of Foreign Gifts Too




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