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Tax on money coming from parents living abroad
I live in US and my parents live abroad. They want to help me pay what’s left of my home loan here in US. Do I need to pay taxes on the money coming from them? If yes, what can be done to minimize the tax I have to pay?
Thank you, Cuptor |
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No U.S. tax to donee on gifts received. To make certain your parents as donors avoid U.S. gift tax on the transfer, you may want to set up a foreign bank account and have them transfer from their foreign account to your foreign account and then you can transfer the cash to the U.S. This approach requires that you file Form TD F 90-22.1. |
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In the U.S. the receiver of the gift does not pay any tax. So you can get money from your parents without any taxes. If your parents are not U.S. citizens and residents then they also don't have any gift tax implication. You can get money direct to your U.S. bank account. Getting transferred in your foreign bank is not needed. Read Your U.S. Tax Return: The U.S. Gift Tax |
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I disagree with MukatA regarding transfers directly to U.S. bank accounts. Further, you can get much better information regarding gifts by nonreadient aliens from Form 709 instructions at http://www.irs.gov/pub/irs-pdf/i709.pdf (see page 3 of instructions), than by the link MukatA provides. |
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Well I agree WITH mukata for the simple fact he qualified his answer by saying "If your parents are NOT US Citizens". If his parents are not US citizens, they won't have a ss# and won't be subject to our IRS.
If his parents WERE citizens, then I'd agree with IntlTax. Can look at these two areas for further details. Your U.S. Tax Return: The U.S. Gift Tax http://www.irs.gov/pub/irs-pdf/i3520.pdf |
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