A U.S. person who receives more than 100,000 dollars in gifts or bequests from a foreign individual in a year, or a smaller inflation-adjusted amount from a foreign corporation or partnership, must report it on Form 3520, even though the gift itself is not taxable.
The penalty for not reporting is 5 percent of the gift per month, up to 25 percent, assessed automatically. An inheritance from a parent abroad is the most common trigger.
Why it matters: the gift is tax-free and the penalty for silence is enormous. See Form 3520.
FBAR, FATCA, streamlined procedures, voluntary disclosure, and foreign trust and gift reporting.
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