Form 3520

Forum|Forum|3 years ago
March 2, 2023
3 replies
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I received a gift from a foreign country in Feb. 2023.

It's my understanding that I don't have to file Form 3520 until April '24.

Is that correct or do I file it this year, 2023?

Thank you in advance!

Not A Product Question

Best answer by MAK70

That is correct- it is due on the same day as your tax return will be so since you received the gift in 2023, you do not have to file until next year. Remember that it is filed separately and must be mailed to the IRS.

Send Form 3520 to the following address.

Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409

MAK70Answer

Send Form 3520 to the following address.

Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409

SorelyaAuthor

Thank you for your quick reply, wonderful

pk12_2

Employee

@Sorelya , while agreeing with the excellent reply from @MAK70 , just wanted to make sure you were aware of the following

(a) you said " gift from a foreign country " ----- hope you are talking about a foreign person / trust / estate i.e. what determines the need for the filing of 3520 is the status of the donor --- Non-Resident Alien, a foreign trust or Estate , established under the laws of a foreign country

(b) you have to be a US person when the gift was received i.e. US citizen or Green Card or Resident for Tax purposes

(d) generally we are talking about cash / liquid/semi-liquid gift here

(e) because the donor is foreign ( a non-resident alien person / entity ) there is no requirement for the donor to do anything for US purposes.

(f) the donor cannot / must not be a sanctioned person/entity or you will run afoul of the treasury sanction rules ( doing business with the "enemy" / money laundering)

(g) there is no tax implications for the donee ( recipient) but not reporting the gift attracts rather onerous penalty.

(h) also note that both FBAR and / or FATCA ( form 8938 ) may also come into play depending on the nature and the transfer " history" of the gift

Hope this helps

SorelyaAuthor

Thank you for the detailed answer.

a) the donor is a non resident alien

b) I am a us person

c and d) the gift is an apartment, slightly over the reporting price

f) donor is not sanctioned

h) I was not aware of form 8938, will research it now

Thank you! Much appreciated

pk12_2

Employee

@Sorelya , an apartment, that means there is no need for FBAR ( FinCen form 114 ) or FATCA ( form 8938 ). Form 3520 is still required -- but you do understand that the basis of the gift ( for purposes of computing capital gain under US tax laws ) would be basis of the donor -- it is usually better ( tax wise ) to receive as part of inheritance because then the basis is Fair Market Value of the asset ( hence reduced Capital gain -- US does not index basis as in countries like India ).

Hope this helps

MUSTANGSally89

Hello! Trying to understand if by paying for one of the premium turbotax services ("max" for instance) I can get help filling form 3250 for foreign gifts?

DoninGA

Employee

@MUSTANGSally89 wrote:

Hello! Trying to understand if by paying for one of the premium turbotax services ("max" for instance) I can get help filling form 3250 for foreign gifts?

TurboTax does not support IRS Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts

Go to this IRS website for the Form 3520 and Instructions - https://www.irs.gov/forms-pubs/about-form-3520