Will I be taxed as a US resident alien on a $40K cash gift from the UK?
March 18, 2018 9:18 AM Subscribe
I am a resident alien in the US and have a relative in the UK who wishes to gift me $40K cash. If I transfer this sum in one go, will I be taxed on it? I can't find a clear answer on the IRS site or elsewhere, and I'd hate to move it over here and lose a large chunk come tax time.
Best answer: Unless the giver of the gift in the UK is an expatriate and the source of the funds of the gift are funds that would otherwise have escaped U.S. estate and/ or gift taxes as a consequence of expatriation, then no, you do not have pay taxes on the gift (in the U.S. any taxes on gifts are paid by the giver of the gift, not the receiver). You may need to file form 3250 to report the gift depending on the size and source of the gift. For details see IRS: Gifts from Foreign Person and the instructions for form 3250.
posted by RichardP at 9:32 AM on March 18, 2018 [2 favorites]
posted by RichardP at 9:32 AM on March 18, 2018 [2 favorites]
Response by poster: Wow - that was fast: thanks!
posted by my log does not judge at 9:37 AM on March 18, 2018
posted by my log does not judge at 9:37 AM on March 18, 2018
One clarification to RichardP's excellent answer: on the linked IRS page, "U.S. person" has a specific meaning, including both U.S. citizens and green card holders, plus certain others. Check to make sure you qualify as a U.S. person for tax purposes.
posted by beagle at 9:39 AM on March 18, 2018
posted by beagle at 9:39 AM on March 18, 2018
Response by poster: Thanks, beagle - yes: I qualify.
posted by my log does not judge at 9:42 AM on March 18, 2018
posted by my log does not judge at 9:42 AM on March 18, 2018
Gift tax is super convoluted—the giver pays any tax. The donor is not assessed any tax before exceeding a lifetime limit of such gifts, which is comically high — $5.6 million. There are some reporting requirements for donors who are taxpayers when annual gifts exceed the annual exclusion for gifts ($15,000), but liability does not kick in until the lifetime exemption is reached.
The recipient does not have to report the gift as income.
posted by notyou at 9:43 AM on March 18, 2018
The recipient does not have to report the gift as income.
posted by notyou at 9:43 AM on March 18, 2018
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posted by slkinsey at 9:29 AM on March 18, 2018