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Are there any rules regarding receiving monetary gifts from family abroad? My fiance's parents want to wire us $25,000 from Brazil to be used on a down payment on a house. What are the tax or other implications?

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    I did some research and I think I found the answer at the IRS. Here origin.bankrate.com/brm/itax/tax_adviser/20060823a1.asp and www.irs.gov/pub/irs-pdf/i3520.pdf Essentially, for a gift from a family member there is a reporting threshold of $100,000. Meaning, if you recieve less than $100,000 gift from family abroad, you don't have to report it. – user1966 Sep 11 '11 at 3:01
  • Submit an answer and accept it. I think you are right =). The relatives in Brazil might have some issues with taxes, but you shouldn't. – MrChrister Sep 12 '11 at 16:18
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    I think mortgage lenders are particular about gifts being used for down payments. If you want to use it for a down payment, I would talk to a mortgage lender and ask how to do it. Sometimes they want a letter stating it is a "gift" and not a "loan", etc. – Alex B Sep 12 '11 at 17:07
  • @AlexB How do they know it wasn't simply "savings" if the mortgagee doesn't bring it up? Not questioning your advice, I'm simply asking about the practices regarding such a requirement. – Nicole Sep 26 '11 at 22:05
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    @Renesis If they look at your past bank statements and see a large deposit, they can ask about it. It's happened to a few people I know. – Alex B Sep 26 '11 at 22:07
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From the OP in a comment:

I did some research and I think I found the answer at the IRS. Here http://origin.bankrate.com/brm/itax/tax_adviser/20060823a1.asp and http://www.irs.gov/pub/irs-pdf/i3520.pdf Essentially, for a gift from a family member there is a reporting threshold of $100,000. Meaning, if you receive less than $100,000 gift from family abroad, you don't have to report it. – user1966 Sep 11 at 3:01

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I would create documentation for the gift by having the giver write a short note. That way, if the IRS questions a large transfer to you, you can show that it is a "gift" and not "income."

If the GIVER were in the U.S. the gift would be limited to something like $11,000 per year, ($22,000 per couple), per recipient. The giver would have to report and pay a "gift tax" on anything above that.

But one giving couple can give a total of $44,000 a year to one receiving couple ($22,000 per recipient).

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