Hi,
My wife and I are permanent resident of the US with Green Cards.
We have immediate family (living in Canada) that wants to give us 100K$ to help us pay our mortgage faster and cheaper.
If the we get a deposit of 100K$ in our Canadian RBC Bank account and then transfer this amount into our US account, what are our tax obligations?
This is to apply on our primary residence. We have bank accounts with RBC Bank in Canada and US so it is very easy to transfer fund. RBC Bank can only allow the transfer of 25K$ a day.
Any advice would be appreciated.
Thanks.
US Permanent Resident - Canadian gift of 100K$ from family
Moderator: Mark T Serbinski CA CPA
Firstly if you put it in a CND bank and the amount is over $ 10K you have a reporting requirement for FBAR to do to the IRS. All gifts over say $ 13,000 are subjectr to gift tax , but as a USC you have a lifetime Estate exemption that covers this so it will not be taxable but you have to file a gift tax return to claim the excess over the annual gift tax ewemption against the estate tax lifetime exemption and you can double up for you and your wife.
Its not taxed but you have to report it and do not put it in a CND bank unless you are already reporting the foreign bank accounts since this will make you reportable fro teh foreign bank accounts too.
Its not taxed but you have to report it and do not put it in a CND bank unless you are already reporting the foreign bank accounts since this will make you reportable fro teh foreign bank accounts too.
JG
JG has this mixed up. US taxpayers pay gift tax on money they GIVE, not GET. The annual limit or The lifetime exclusion doesn't even come into the picture here. Sorry for the misinformation.
So, your non-US taxpayers can give you whatever ammount they wish to , with no tax consequences for you or them.
YOU however, if the gift is over $100K from any foreign individual, must list this on a form 3520. No tax, just report.
And putting in a Cdn bank is not the endo of the world, since, again thios would pnly be a report, no tax.
But best to keep it in your home country.
So, your non-US taxpayers can give you whatever ammount they wish to , with no tax consequences for you or them.
YOU however, if the gift is over $100K from any foreign individual, must list this on a form 3520. No tax, just report.
And putting in a Cdn bank is not the endo of the world, since, again thios would pnly be a report, no tax.
But best to keep it in your home country.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
It is not taxed but it is subject to filing the gift tax return because its over $ 13K I think basically the information I gave was right on, I know as well as everyone else who is subject to gift tax it does not matter you still have to file the return the exemption is the key to filing or not.
Its fine to keep the money in your home country but he is transfering it right away to pay down the house so why create a repoerting requirement for FBAR fir one day since its based on the highest vakue during the year unless there is other money staying in the account I would not want to start a trend of filing the FBAR form for a one time trf.
Its fine to keep the money in your home country but he is transfering it right away to pay down the house so why create a repoerting requirement for FBAR fir one day since its based on the highest vakue during the year unless there is other money staying in the account I would not want to start a trend of filing the FBAR form for a one time trf.
JG
Its not a gift tax return which is Form 709, JG, it is a foreign gift report on form 3520.
No limit, no lifetime exclusion.
The 13K limit is if THEY gave a gift to someone, not if they recieve.
No limit, no lifetime exclusion.
The 13K limit is if THEY gave a gift to someone, not if they recieve.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
This is great information.
So now, i think it would be better for me to avoid having to deposit this amount in a CND bank and then transfer to my US Bank. This could avoid me any issues with IRS because they want to know any bank account outside the US with more than 10K$ Correct?
I would like to have a wire transfer from my family account in Canada to our US account.
Is that possible?
BTW, the amount will be a little less than 100K$ to avoid the form 3520.
Am I right here?
So now, i think it would be better for me to avoid having to deposit this amount in a CND bank and then transfer to my US Bank. This could avoid me any issues with IRS because they want to know any bank account outside the US with more than 10K$ Correct?
I would like to have a wire transfer from my family account in Canada to our US account.
Is that possible?
BTW, the amount will be a little less than 100K$ to avoid the form 3520.
Am I right here?
"This could avoid me any issues with IRS because they want to know any bank account outside the US with more than 10K$ Correct? "
Not exactly. If the total of all financial accounts (bank, investment) is over USD 10,000 at any time during the year, then you need to submit an FBAR on all accounts (whether over USD 10,000 or not). And this includes accounts where you have no ownership in the money as long as you have signatory power over the account - a common example might be if you have power of attorney for an aging Canadian parent. Do you have any signatory power over the "family account" in Canada?
Also, the USD 100,000 trigger for a 3520 report is for the total bequest, not individual transfers, so don't try to split them up to avoid the form. By the way, it is not much trouble to file a 3520 - I just did one for my wife to sign as she received a bequest over 100,000 from her mother. The main issue was reading the instructions to make sure that most of them had no bearing on a bequest (they concern filing for trusts). Just fill out the beginning and Part IV for the bequest. Note that is sent to a special address, not included with your 1040.
A direct wire to your US account is safe and simple.
Not exactly. If the total of all financial accounts (bank, investment) is over USD 10,000 at any time during the year, then you need to submit an FBAR on all accounts (whether over USD 10,000 or not). And this includes accounts where you have no ownership in the money as long as you have signatory power over the account - a common example might be if you have power of attorney for an aging Canadian parent. Do you have any signatory power over the "family account" in Canada?
Also, the USD 100,000 trigger for a 3520 report is for the total bequest, not individual transfers, so don't try to split them up to avoid the form. By the way, it is not much trouble to file a 3520 - I just did one for my wife to sign as she received a bequest over 100,000 from her mother. The main issue was reading the instructions to make sure that most of them had no bearing on a bequest (they concern filing for trusts). Just fill out the beginning and Part IV for the bequest. Note that is sent to a special address, not included with your 1040.
A direct wire to your US account is safe and simple.
rlb is correct.
The insatnt you have more than $10K in an account, even for 10 minutes, all your foreign accounts become reportable. NOw, just to be clear, reporting foreign account is about as easy as picking your 6/49 numbers, so I wouldn;t worry about that. Most Cdns living in US fiel one every year with no issues. Do not overthink this.
But, if you wish to not have to do FBAR reporting, then the only way you can get the money is by having the person write you check (or wire), which you deporit directly into a US account.
Accept the gift, don't fret. Not worth trying to avoid anything.
The insatnt you have more than $10K in an account, even for 10 minutes, all your foreign accounts become reportable. NOw, just to be clear, reporting foreign account is about as easy as picking your 6/49 numbers, so I wouldn;t worry about that. Most Cdns living in US fiel one every year with no issues. Do not overthink this.
But, if you wish to not have to do FBAR reporting, then the only way you can get the money is by having the person write you check (or wire), which you deporit directly into a US account.
Accept the gift, don't fret. Not worth trying to avoid anything.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
First of all, I would like to thank all of you who did reply to this topic.
We will do a wire transfer. This should be trivial.
As far as the 100K$, we need to fill out the 3520 if it exceed 100K$. Is this per year or life time? What about if we do 50K$ in 2013 and 50K$ in 2014?
Now, as far as the 10K$ in an account. We have only 1 bank account that we keep when traveling back to Canada. We always had less than 10K$.
However, my wife and I have RRSPs and the total values is > 200K$. I never submitted a FBAR form. We never got any pennies from those RRSPs account since all the interest/gains are re-invested withing the RRSPs.
Are we in trouble here?
Thanks for your help.
We will do a wire transfer. This should be trivial.
As far as the 100K$, we need to fill out the 3520 if it exceed 100K$. Is this per year or life time? What about if we do 50K$ in 2013 and 50K$ in 2014?
Now, as far as the 10K$ in an account. We have only 1 bank account that we keep when traveling back to Canada. We always had less than 10K$.
However, my wife and I have RRSPs and the total values is > 200K$. I never submitted a FBAR form. We never got any pennies from those RRSPs account since all the interest/gains are re-invested withing the RRSPs.
Are we in trouble here?
Thanks for your help.
In short, you are in trouble. First, your RRSPs need to be declared using 8891. not doing this has tax, penalty and fine possibilities. You need to fix this.
But, ALSO since you have foreign accounts that total over $10K at any time in year, you have to report ALL foreign accounts on FBAR! You MUST go back and fix this for past 6 years for FBAR.
as far as foreign gifts it is per year. BUt, as I said, it would be silly to waste any effort trying to avoid the reporting aspec. Take the gift the way the GIVER wants to give it to uou, and then do the simple reporting that is required. No "warning" should ever have been made about this when you asked the question.
But, ALSO since you have foreign accounts that total over $10K at any time in year, you have to report ALL foreign accounts on FBAR! You MUST go back and fix this for past 6 years for FBAR.
as far as foreign gifts it is per year. BUt, as I said, it would be silly to waste any effort trying to avoid the reporting aspec. Take the gift the way the GIVER wants to give it to uou, and then do the simple reporting that is required. No "warning" should ever have been made about this when you asked the question.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
"You MUST go back and fix this for past 6 years for FBAR." If you have had your green cards for less than six years, of course, you do it from the year of your US residency or green card. Please note, as nelsona implied in his instructions, that the RRSPs count toward the $10,000 trigger and also must be reported on FBAR. On your FBAR report, include an explanation of why you are filing late for previous years - for example, that you have only now become aware that the requirement inclusdes RRSPs.
It may not be possible now to backfile an 8891 election due to a change in IRS policy. I am not sure how to help you here.
It may not be possible now to backfile an 8891 election due to a change in IRS policy. I am not sure how to help you here.
No, I knew that you understand this better than I, and you have documented it in your previous posts. I thought perhaps there was a slight chance of misunderstanding due to the conjunction with backfiling the FBAR. slamarre would be well advised to search the forum for your previous posts documenting the 8891 issue.