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For a "Large gift from foreign persons", are my father (or brother) and my uncle considered "related parties"?

Forum|Forum|3 years ago
January 23, 2023
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On the page, "Large Gifts or Bequests from Foreign Persons", it says that "you must aggregate gifts received from related parties". (https://www.irs.gov/businesses/gifts-from-foreign-person)

On the instructions for form 3520 it defines , "A member of your family—your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc.), lineal descendants (children, grandchildren, etc.), and the spouses of any of these persons;) (https://www.irs.gov/instructions/i3520)

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I would like to confirm, if I were to receive a large gift from my father or brother (say $80,000), would a gift from my uncle (mom's brother, my mom now deceased and father remarried) (say $30,000), be considered "related parties"? Would these gifts need to be aggregated to a total of $110,000 and be over the reporting threshold?

Thank you!

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Best answer by DaveF1006

According to the 3520 instructions, if more that $100,000 is received from a non-resident alien, his gift must be reported on the 3520. This includes gifts from foreign persons related to the non-resident alien. If all parties are related, then the aggregate total of $110,000 must be reported on the 3520.

To be considered related, there must be a lineal relationship between your father, brother and uncle. Since your uncle has a lineal relationship with your brother, then the aggregate gift amount of $110,000 must be reported on the 3520 per IRS stipulation.

DaveF1006Answer

According to the 3520 instructions, if more that $100,000 is received from a non-resident alien, his gift must be reported on the 3520. This includes gifts from foreign persons related to the non-resident alien. If all parties are related, then the aggregate total of $110,000 must be reported on the 3520.

To be considered related, there must be a lineal relationship between your father, brother and uncle. Since your uncle has a lineal relationship with your brother, then the aggregate gift amount of $110,000 must be reported on the 3520 per IRS stipulation.

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R

rg2Author

Thank you for the reply. That is very helpful.

Would there be a linear relationship between my father and my uncle (mom's brother)? As a note, my mom passed away 30 years ago and my dad remarried. I don't know if that affects anything.

DaveF1006

No there is no linear relationship between your father and uncle because they are not biologically linked. Your mother's passing is not relevant in this case.

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