[taxabletalk] Russ: When You Have to Report a Gift

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Posted by Russ:
When You Have to Report a Gift
http://www.taxabletalk.com/posts/1228234570.shtml


   One question that I'm often asked are about gifts. I've just received
   a large gift or inheritance; must I pay tax on it? The good news is
   that gifts aren't taxable to the recipient (if the gift is interest
   bearing, such as a gift of money in a savings account, you will owe
   tax on the interest received).
   Unfortunately, there are gifts that must be reported even though
   they're not taxed. If you receive a gift of more than $100,000 from a
   non-resident alien individual, or a gift of more than $13,258 from a
   foreign corporation or a foreign partnership, it must be reported to
   the IRS on [1]Form 3520. The penalty for not reporting the gift is 5%
   of the value of the gift per month late, up to a maximum of 25%. There
   are special rules if you are the recipient of a gift from a foreign
   trust.
   Note that Form 3520 is filed separately from your tax return but is
   due on the same date as your tax return (including extensions). [2]The
   IRS has more in this release. Note that the link in the release to the
   [3]Form 3520 instructions is invalid; the link I have provided works.
   [4]
   Hat Tip: Roth Tax Updates

References

   1. http://www.irs.gov/pub/irs-pdf/f3520.pdf
   2. http://www.irs.gov/businesses/article/0,,id=200722,00.html
   3. http://www.irs.gov/pub/irs-pdf/i3520.pdf
   4. http://www.rothcpa.com/archives/004243.php