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No Gift-Tax Worries for Gift from Abroad

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in Small Business Tax

Q. My son is getting a very large gift from a relative in Japan. The money is going directly into his bank account. Does he have to pay any gift tax on this foreign gift? D.Z., Ft. Lee, N.J.

A. No. There are no gift-tax ramifications for gifts sent directly from an individual in a foreign country to a U.S. bank account. Gift tax is imposed on the donor, not the recipient. But U.S. recipients are required to report foreign gifts exceeding $100,000 on Form 3520 (Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts). Find it at Tip: Foreign donors should check their countries’ laws for any other requirements.

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