martinaP

My dad who is a non-US resident wants to wire transfer one million to my US bank account from abroad for safe keeping, because he has very serious concerns about the liquidity of the banks in his country.

Is there a limit on the amount to be transferred? Is it wiser to break the amount into many smaller pieces? Do I still need to file form 3520 that applies for amounts over 100,000? This form seems to refer to gifts, and my dad is not giving me the money as a gift, but merely for safe keeping - so I would think that this form should not apply - otherwise I will need to pay tax for returning the money back to him when he asks.

Duncan Roberts

You need to talk to both banks and a CPA that knows their stuff. It may be that neither bank will do the transfer and you may be subjected to a lot of tax, the government won't care that it's just resting in your account. Sounds like a bad plan really, why doesn't he just open an offshore account?

martinaP

Thanks for your reply. One of my US accounts is joint with my dad listed on it. Does that make any difference? It sounds like he is transferring money from his foreign to his US account - which seem quite reasonable,

Poppy girl

Is he single

sir_eccles

Three things occur to me:

- Money laundering rules/laws generally require banks to report any transfer over $10,000.

- Some banks have maximum deposit limits, i.e. an account can't have a balance greater than X, usually hidden in the small print

- FDIC insurance is only guaranteed for the first $250,000 at the moment

Bill_S

A million dollars? Make an appointment with the manager of your bank and discuss it with him/her. As Duncan suggested, get a CPA on board as well.

TracyTN

Duncan Roberts

It is reasonable and I'm sure a lot of people do the same ting every day, but don't expect it to be tax free and you personally may need to declare it as income on your tax return. CPA who deals with foreign transfers is who you need to ask.

martinaP

To the best of my knowledge, gifts are taxed by the person who makes them. Since the sender is not a US person for tax purposes, no tax is due, even if the amount is deemed to be a gift.

Bill_S

But if it's an interest-bearing account, the interest earned will be taxable. Even at only 1%, a million bucks will generate $10,000 per year.

Talk to your banker and a CPA.

Jerseygirl

If it's a joint account he's not really giving it to you for safe keeping is he? He's moving it into his account surely.

Any amount over $10K going into or out of an account is reported automatically.

A joint account is insured for $250K per person...but that still leaves a big chunk uninsured.

augigi

If you already know, why are you asking us?

Duncan Roberts

To the best of my knowledge that only works up to a certain amount, and that amount is no where near a million, it's not even close to 100k. You can do what you want, sounds like you know what's what anyway, but I would expect to lose a considerable amount, have your taxes next year audited and have some contact from government security agencies.

robin1234

You don't mention what country he lives in.

goatherder

Hi

I recently transferred a similar amount over from Australia. The US of A Gift rules clearly state that the person making the gift has the tax liability rather than the person receiving the funds. If the person making the gift is a non-resident alien then its not taxable in the US. This only applies if the gift relates to a non USA asset (ie if they give you shares held in US companies then its taxable etc....).

My funds where held up for a money laundering check when they entered the us of a. This was done by the correspondent bank that my bank uses. I had to provide proof of where the funds came from (my Australian bank account).

FYI - it was easier process wise for me to describe the transfer as a gift from my relatives than attempt to document where the funds came from (it was our savings over a long contracting career in the UK). So that is the route I took. My parents just signed a form saying it was a gift and that was it. Funds cleared into my US bank account 1 day later.

Assuming its not US property being transferred and your parent is a non-resident alien under the IRS then you should be gold. Just be prepared to document where it came from particularly if the jurisdiction involved is not on the White House's Christmas Card list.

Goat...