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No tax worries over foreign gift

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. My mother, who lives in Columbia, is giving me $75,000. Does that create any income or gift tax problems for me? S.T., Key Biscayne, FL

A. No. The IRS doesn’t impose any income or gift tax consequences for receiving a gift regardless of the source (although it could affect the taxable gain or loss if you sell gifted assets). Furthermore, the IRS doesn’t impose any gift tax consequences for gifts made by foreigners. In any event, the donor, not the donee, pays the gift tax.

Tip: If you receive more than $100,000 from a person living abroad, the IRS requires that you report the gift on Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. Find the form at www.irs.gov/pub/irs-pdf/f3520.pdf.

 

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