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I understand that gift from a foreign entity (in this case, my non-US parents) is not taxable, but has to be reported.

According to the IRS' instruction on Form 3520, I only have to report the gift if it's over $100,000. However, after I brought the cash into the US (without declaring at customs because it's slightly under $10,000), I made a $10,000 cash deposit at my bank account, which crosses the $10,000 threshold that requires a Form 8300 reporting. Without reporting, this could look suspiciously like money laundering to the IRS (who has been quite trigger-happy in seizing money). So I'd like to declare the origin of this money.

How should this be done? Form 8300's instructions seem designed for reporting cash payments of business, not cash gift.

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    With a name like Heisenberg they are going to assume you're laundering money anyway... – CactusCake Apr 6 '17 at 13:21
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Actually banks aren't required to (and don't) report on 8300 because they already report $10k+ cash transactions to FinCEN as a Currency Transaction Report (CTR), which is substantively similar; see the first item under Exceptions in the second column of page 3 of the actual form. Yes, 8300 is for businesses, that's why the form title is '... Received In A Trade Or Business'. You did not receive the money as part of a trade or business, and it's not taxable income to you, so you aren't required to report receiving it. Your tenses are unclear, but assuming you haven't deposited yet, when you do the bank will confirm your identity and file their CTR. It is extremely unlikely the government will investigate you for a single transaction close to $10k -- they're after whales and killer sharks, not minnows (metaphorically) -- but if they do, when they do, you simply explain where the money came from.

The IRS abuses were with respect to people (mostly small businesses) that made numerous cash deposits slightly under $10k, which can be (but in the abuse cases actually was not) an attempt to avoid reporting, which is called 'structuring'. As long as you cooperate with the bank's required reporting and don't avoid it, you are fine.

  • This makes sense. I did make the cash deposit via an ATM and not in a branch. I understand your comment to mean that they filed the CTR in the background and may or may not need to contact me? – Heisenberg Apr 8 '17 at 13:42

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