I am a Canadian resident who wants to gift my adult US child $175K Canadian. What are the tax implications for the US resident who resides in California?

  • Are you asking solely about your child's tax implications, or also your own? – Ben Miller - Remember Monica Dec 22 '16 at 23:20
  • Just my child's. In Canada gifts are tax free. – ABranden Dec 22 '16 at 23:20
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    At a minimum, it would need to be declared on page 6 of Form 3520. Gifts are normally not taxable to the receiver in the U.S. I can't answer how this changes if the giver is not a U.S. resident. – user4556274 Dec 22 '16 at 23:43
  • You're not a US citizen, right? You're a Canadian citizen (or something else)? (Not that it makes a difference for the receiver.) – Joe Dec 22 '16 at 23:46
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    As an aside, are you looking to adopt another US adult? – Engineer Toast Dec 23 '16 at 14:28

The United States taxes gifts to the giver, not the receiver. Thus, in your case there would be no direct tax implications from the receiver so long as you are gifting cash and the cash is in Canada. If you are gifting capital (stocks, property, etc.), or if you are gifting something that is in the United States (US stock, for example), there may be a tax implication for either or both of you.

Your adult child would, however, have to file an IRS form since the gift is so large (over $100k) to create a paper trail for the money (basically proving s/he isn't money laundering or otherwise avoiding tax).

See this article in The Globe And Mail which goes into more detail.

There are no implications, except that there is a form (IRS Form 3520) that would have to be filed by the U.S. recipient if the foreign gift is over $100,000 (U.S.). But the child would still receive the gift tax-free. The U.S. gift tax would only apply when the Canadian parent makes a gift of U.S. “situs” assets, which are typically only U.S. real estate or tangible personal property such as a boat located in the U.S. For gift-tax purposes, U.S. shares are not considered to be U.S. situs assets.


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