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Tax guidelines and regulations for large money transfers into US

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Failing to file could land you in hot water with the IRS.

If you’re planning to transfer more than $10,000 from overseas, a money transfer service can help you save on fees — but you still need to report the transfer to the US government.

Do I have to report large transfers into the US?

No matter where you’re from, if you’re receiving more than $10,000, you’ll need to abide by US laws put in place to both protect your money and protect the interests of the government.

By law, banks report all cash transactions that exceed $10,000 — and any transaction of any amount that alerts their suspicions. Money transfer businesses, which often solely send money between countries, sometimes have reporting thresholds as low as $1,000.

US law requires banks and money transfer companies to report:

  • Your name and contact information.
  • The name and contact information of the person who sent you the money.
  • If it’s a bank transfer, the financial details of the recipient, including SWIFT code.
  • Your banking details, including your bank account number.
  • The amount you received.
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    Documents specific to sending large amounts into the US

    If you are living in the US and received foreign gifts of money or other property, you’ll need to report it on Form 3520 — Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts.

    US citizens and residents are required to use Form 3520 for:

    • Gifts or bequests valued at more than $100,000 from a nonresident alien individual or foreign estate.
    • Gifts of $15,601 or more from foreign corporations or foreign partnerships (including from people related to these corporations or partnerships).

    Form 3520 is considered an “information return,” rather than a tax return, because foreign gifts generally are not subject to income tax. However, you are subject to stiff penalties for failing to submit Form 3520 when it is required.

    Who is responsible for filing Form 3520 — me or the person who sent the money?

    As the recipient of the transfer, you are solely responsible for reporting the amount you received during the current tax year with your annual tax filing.

    The penalties for failing to file Form 3520 on time are equal to the greater of $10,000 or the following:

    • 35% of the gross value of the distributions received from a foreign trust.
    • 5% of the gross value of the portion of the amount treated as owned by you.
    • A separate 5% penalty if you fail to furnish correct required information.

    Why is the US government interested in how much I receive?

    Laws are in place to protect you and the government from fraudulent activity. By monitoring transactions in and out of the US, authorities are able to:

    • Protect your sensitive information is key.
    • Lower the risk of illegal and fraudulent transfers.
    • More clearly identify money laundering schemes.
    • Inhibit the ease of sheltering taxes in untraceable offshore accounts.

    Since 9/11, the US government has put even more stringent laws in place. For example, the Patriot Act allows the government to track money more carefully due to terrorism.
    International money transfers that won’t break your business

    What should I expect when receiving money from overseas?

    To prevent the US government from delaying or canceling your money transfers into the country, you’ll need to provide proof of a government-issued photo ID — a driver’s license or passport, for example — and proof of your address.

    If you already own an account with the bank or money transfer company, you may not need to provide ID each time you receive money. However, online money transfers may have stricter rules when it comes to proof of ID and could ask for additional documentation or to verify your identity by phone.

    What other steps should I take to avoid legal or tax problems?

    To avoid the severe penalties that come with a failure to report large sums of money into the country, speak with a professional to guarantee that everything is above board and complies with the laws of all countries involved.
    Sending a lot out of the country? Know what the IRS expects of you

    Questions you’ve had about large transfers

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    26 Responses

    1. Default Gravatar
      DavidMay 20, 2019

      My wife is receiving an inheritance from her late mother’s estate in the amount of approximately US$50,000 , from Canada. Who do we have to report this to?

      • Avatarfinder Customer Care
        BritnyMay 21, 2019Staff

        Hi David,

        Thank you for your inquiry. I’m very sorry to hear about your loss.

        Form 3520 is not required until gifts or bequests are valued at more than $100,000 USD and should be submitted with a yearly tax return. However, there are exceptions to when this form should be filled out depending on the situation. I recommend visiting the IRS page on this topic and speaking with a professional to guarantee everything is compliant: https://www.irs.gov/businesses/gifts-from-foreign-person

    2. Default Gravatar
      GrahamMay 9, 2019

      I have an inheritance in the UK. Do I have to file a Form 3520 prior to transferring the fund to my US bank? If so, to what IRS agency should I forward the Form 3520?

      • Avatarfinder Customer Care
        JeniMay 9, 2019Staff

        Hi Graham,

        Thank you for getting in touch with Finder.

        If you already have an active US bank account where your inheritance will be sent to, you do not have to do anything as the bank will be asking you more info on this large sum of money and will be reporting this to the IRS. However, you are responsible for reporting the amount you received during the current tax year with your annual tax filing – that’s when you need to submit form 3520 to the IRS.

        I hope this helps.

        Thank you and have a wonderful day!

        Cheers,
        Jeni

    3. Default Gravatar
      TedApril 27, 2019

      I sold my cottage in Canada and intend to bring the already taxed proceeds to my home state of Ohio. Any problem?

      • Avatarfinder Customer Care
        JoshuaApril 27, 2019Staff

        Hi Ted,

        Thanks for getting in touch with Finder. I hope all is well with you. 😃

        If you are receiving more than $10,000, then you would need to report that transfer to the IRS. To know more information, it would be a good idea to check with IRS and know more which form you should use and how to go about reporting your transaction.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    4. Default Gravatar
      RodneyApril 10, 2019

      Suppose that a real estate developer secured a multi million $ loan from an overseas lender/fund, how would such transfer into the US be managed and regulated?

      • Avatarfinder Customer Care
        johnbasanesApril 11, 2019Staff

        Hi Rodney,

        Thank you for reaching out to Finder.

        The page we are on offers guides and articles that could assist you in making the transfer possible. The IRS regulates and manages large transfers of money into the US and this is in collaboration with the US bank where the money would be transferred to. Hope this helps!

        Cheers,
        Reggie

    5. Default Gravatar
      TonyApril 8, 2019

      I have a significant amount of inheritance money that I’d like to transfer out of Europe into the US that is beyond all US reporting thresholds. I understand all of the forms I need to fill out for the government.

      From what I can gather, it sounds like my best option is to go through one of these money transfer services. Are there any guarantees that these services are legitimate? This is my first and only experience with this type of service. Am concerned that it would be relatively easy for the money to get stolen.

      Any guidance would be most appreciated

      • Avatarfinder Customer Care
        JeniApril 9, 2019Staff

        Hi Tony,

        Thank you for getting in touch with Finder.

        You may check some government pages to check the legitimacy of your chosen provider like BBB. In addition, you may read some reviews or check online forums of your chosen provider/s to help you decide which to go with. If you are still undecided, you may consider bank to bank transaction directly as it is safe. However, banks have lower exchange rates and higher fees.

        I hope this helps.

        Thank you and have a wonderful day!

        Cheers,
        Jeni

    6. Default Gravatar
      PhilMarch 4, 2019

      I have earned about $50,000 last year and that’s how it shows in my tax income filled. I want to bring from another country the amount of $50,000 to buy a house. Is that going to interfere in my tax income or I will pay the tax right on time of receiving that money? I don’t want to overpay taxes on my tax income next year. Thanks.

      • Avatarfinder Customer Care
        johnbasanesMarch 5, 2019Staff

        Hi Phil,

        Thank you for reaching out to Finder.

        Since you have already reported the $50,000 you received last year. You just need to report the next amount of $50,000 which you plan on receiving this year. As the recipient of the transfer, you are solely responsible for reporting the amount you received during the current tax year with your annual tax filing.

        The penalties for failing to file Form 3520 on time are equal to the greater of $10,000 or the following:

        35% of the gross value of the distributions received from a foreign trust.
        5% of the gross value of the portion of the amount treated as owned by you.
        A separate 5% penalty if you fail to furnish correct required information.

        Please see the assistance on a tax expert on advise needed when filing this. Hope this helps!

        Cheers,
        Reggie

    7. Default Gravatar
      JojoJanuary 29, 2019

      Hi, I’ve read that to avoid hassle with IRS is not receiving money more than $10000. So is it possible to receive money monthly, let say in the amount of $9900? is that still legal? Does the limit $10000 is for every transfer or weekly/monthly/yearly?

      • Avatarfinder Customer Care
        JoshuaJanuary 30, 2019Staff

        Hi Jojo,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        There’s really no straightforward answer to your question. The government has its own way of identifying suspicious financial activities. For example, if you are receiving or sending money less than $10,000 in a short span of time, that may attract their attention. Moreover, having multiple accounts, frequent deposits or withdrawals with no apparent business transactions, accounts with a high volume of activity but with a low balance, and others, could catch the authority’s attention and that may mean.

        So, be careful with how you send or receive money and be sure that you don’t break any law. You might want to get in touch with the IRS to confirm and be sure that you are abiding by their rules.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    8. Default Gravatar
      GenevieveJanuary 28, 2019

      May one person receive $10,000.00 from 2 different donors (this would make a total of $20,000.00 BUT 2 different sources)

      • Avatarfinder Customer Care
        johnbasanesJanuary 29, 2019Staff

        Hi Genevieve,

        Thank you for reaching out to finder.

        Though this is 2 separate transactions of $10,000, the IRS may still see this as a suspicious transaction. If the IRS even suspects you’re guilty of restructuring, it can take your cash. So prior to the transaction being made, it is still best to contact the IRS directly to know what forms are to be filled out. Hope this helps!

        Cheers,
        Reggie

    9. Default Gravatar
      NalaJanuary 4, 2019

      Can I receive money about $100.00 as a present for my daughter by the mail from overseas? Thank you.

      • Avatarfinder Customer Care
        AshJanuary 4, 2019Staff

        Hi Nala,

        Thank you for reaching out to us.

        Yes, you may receive a gift of $100 for your daughter and you need not to advise IRS as it doesn’t exceed $10,000.

        I hope this helps.

        Please do not hesitate to reach out again if you have additional questions.

        Cheers,
        Ash

    10. Default Gravatar
      SunnyDecember 7, 2018

      Hello, I am from US and I would like to send money to a friend in Poland, about $5000… will he have to pay taxes on the money he receives because I will be paying taxes on my end.

      • Avatarfinder Customer Care
        nikkiangcoDecember 11, 2018Staff

        Hi Sunny,

        Thanks for getting in touch! We are not certain if and how much Poland charges for international money transfers. Best thing to do is for your recipient to ask a bank or the money transfer services you’re going to use to do the transfer for money transfer limits. This way there are no big surprises on both sides. Hope this was helpful. Don’t hesitate to message us back if you have more questions.

        Best,
        Nikki

    US International Money Transfers Offers

    Important Information*
    Logo for XE Money Transfer
    XE Money Transfer

    Offering no maximum and no minimum limit transfers with $0 fees.

    Logo for WorldRemit International Money Transfers
    WorldRemit International Money Transfers

    Use promo code 3FREE to send your first 3 transfers with no fee. Send to 110+ countries for bank-to-bank deposit, cash pickup or mobile top-up.

    Logo for TransferWise
    TransferWise

    Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks.

    Logo for CurrencyTransfer
    CurrencyTransfer

    Exclusive: Minimum transfer of $1,000 for Finder readers (normally $5,000).
    For larger transfers, get no transaction fees and no maximum send limits.

    Go to site