This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.
Quick Q: My wife and I are perm residents in the US and may receive a sizeable cash gift from a Canadian living in Canada. I understand that neither party is subject to any gift tax because a) Gift taxes are applied to the donor, not the donee and b) Canada has no gift tax (so, no donor worries). Ergo, this money is _free and clear_ with zero tax implications for either party. Is that the case?
Also, if it's in the form of a certified check and we drop that into our US account here, will IRS come knocking next year wondering where that money came from? Do we need to note it anywhere on our tax return. Presumably not, but how else, other than monitoring donee accounts, would IRS ever be able to know who a cash gift came from, besides asking the donee who gave it to them?
Since it is a check, the banks will take care of any reporting that is required (for anti-money laundering purposes). Thta is all.
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
Skoorb wrote:Hi, I hope everyone is doing well these days!
Quick Q: My wife and I are perm residents in the US and may receive a sizeable cash gift from a Canadian living in Canada. I understand that neither party is subject to any gift tax because a) Gift taxes are applied to the donor, not the donee and b) Canada has no gift tax (so, no donor worries). Ergo, this money is _free and clear_ with zero tax implications for either party. Is that the case?
Also, if it's in the form of a certified check and we drop that into our US account here, will IRS come knocking next year wondering where that money came from? Do we need to note it anywhere on our tax return. Presumably not, but how else, other than monitoring donee accounts, would IRS ever be able to know who a cash gift came from, besides asking the donee who gave it to them?
Thanks!
No tax to you, likely same to donor (maybe kiability if assets sold to get the cash first, and there are accrued capital gains).
If gift exceeds USD $100,000 (2006 rate), you will likely have to report receipt of gift on IRS Form 3520 (check online instructions for more details).
