When is Form 3520 required for gifts?
| Gift from | Report if total gifts in the year exceed |
|---|---|
| A non-resident alien individual or a foreign estate | $100,000, counting gifts from related people together |
| A foreign corporation or foreign partnership | A lower threshold adjusted each year for inflation |
Gifts below the threshold are not reported. Gifts from a foreign individual are reported in aggregate, without listing each one unless over $5,000. Gifts from foreign companies may be treated as income rather than gifts.
Is the gift taxable?
Not to the recipient. Gift tax, where it applies, is the giver's responsibility, and a non-resident giving cash held outside the US generally owes no US gift tax. Income the gifted money earns later is taxable in the usual way.
A gift is also different from payment for work. Money from a foreign company or client for services is income and is taxed as such, whatever it is called.
What about foreign trusts?
US persons who create, transfer property to, or receive distributions from a foreign trust also file Form 3520, and the trust may have to file Form 3520-A. Penalties for trust reporting failures are higher: generally the greater of $10,000 or 35% of the amount involved.
Payments from a foreign trust are reported even when small.
How do you file?
Total gifts by giver
For the calendar year, in US dollars.
Check the thresholds
$100,000 from individuals and estates, or the lower figure for companies.
Complete Part IV
For gifts and bequests from foreign persons.
File by the return due date
It is a separate filing, not attached to the return; an extension of the return extends it.
What if the money was a loan?
A genuine loan is not a gift and is not reported on Form 3520. Document it with a written agreement, repayment terms and actual repayments. A loan that is never repaid can be treated as a gift.
What does an example look like?
A student living in the US receives $60,000 from her father in Pakistan in March and $50,000 from her mother in December. Because gifts from related people are counted together, she received $110,000 from foreign individuals and must file Form 3520 by her tax return due date. No tax is due on the gifts.
What records should you keep?
Bank records showing each transfer, the name and relationship of each giver, and a short note confirming the money was a gift. Keep them with your return. Banks may also ask about large incoming transfers, and the same records answer them. See FBAR vs Form 8938 if you also hold accounts abroad.
What if you missed it?
The penalty for unreported foreign gifts is 5% of the gift for each month late, up to 25%. The IRS accepts reasonable cause explanations, and first-time abatement can apply to some Form 3520 penalties. File the missing forms with a statement explaining the delay. See first-time penalty abatement.
Received money from family abroad?
We check whether Form 3520 applies, file it with your return, and request penalty relief if a past year was missed.
Questions people ask
Do I pay tax on a gift from my parents abroad?
No. The recipient does not pay tax on the gift, but may need to file Form 3520.
When do I file Form 3520 for a foreign gift?
When gifts from a foreign individual or estate exceed $100,000 in a year, or gifts from a foreign company exceed a lower annual threshold.
When is Form 3520 due?
By the due date of your income tax return, including extensions.
What is the penalty for not filing Form 3520?
For foreign gifts, 5% of the gift per month, up to 25%.
Sources
Every fee, date and rule on this page was taken from these official and primary sources.
Rules and fees change. If you are reading this long after October 1, 2026, confirm the figures with the source before you rely on them.
Related guides
More in Federal tax forms
This guide is general information. It is not tax or legal advice for your situation.