My parents (Indian citizen) sold property in India to individual who lives in UK. He will wire $150K to my US bank. I am US citizen Is this taxable? Reported to IRS?

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@home_owner wrote:

Thanks for replying. Does it matter that wire will not be from my parents account. The purchaser in UK will be sending the funds from his UK bank account to my US bank. I am not related to this individual. He is simply buying my parents property in India.

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The underlying fact of the situation is there are two transactions.

1. Your parents sell property to Mr. Smith.

2. Your parents give you the proceeds of the property sale.

That does not create taxable income for you.  Your parents would be expected to report the sale as taxable income under the laws of their own country.

If you are concerned, I would save proof of the nature of the transaction with your other important papers for 7 years.  That's the maximum length of time the IRS can audit you (the usual length is 3 years but there are some exceptions).  The issue could arise that the IRS, seeing a large deposit from Mr. Smith, might assume Mr. Smith was paying you for property or for performing some kind of work.  I think this is unlikely, but the way to be prepared would be to collect copies of documents from your parents -- the bill of sale from your parents to Mr. Smith, your parents instruction to send the proceeds of the sale to you instead of them, a gift letter from your parents, and maybe a copy of your parents' tax return in their home country proving it was their property and they paid the taxes.

Like I said, I think it's unlikely, but there is no harm in being prepared for the worst.