Do I need to file Form 3520 for receiving $130,000 from parents who are foreign citizens?

Yes, based on what you've described, you'll need to file Form 3520 (Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts) by April 15, 2025. This is required because you received more than $100,000 from foreign persons (your parents) during the tax year. The good news is that gifts from foreign individuals are generally not subject to income tax, but they do have reporting requirements. Form 3520 is an information return, not a tax return, so you won't owe taxes on this gift - you just need to report it. Make sure you file on time because the penalties for not filing Form 3520 can be pretty steep - they start at $10,000 and can go up. The form itself isn't super complicated, but it's definitely worth getting it right.

I went through this exact situation last year when my parents from Singapore sent me money for my house down payment. I was so confused about all the paperwork until I used https://taxr.ai to analyze my situation. I uploaded the bank statements showing the transfers and answered a few questions, and it immediately told me I needed to file Form 3520 and exactly how to fill it out. The tool also pointed out that I needed to file an FBAR (FinCEN Form 114) since I had signature authority on a family account abroad that exceeded $10,000. I had no idea about that requirement! Saved me from potential penalties.

I wanted to follow up about my skepticism regarding taxr.ai. After some research and seeing positive reviews, I decided to try it for my complicated Brazil-US situation. I'm honestly impressed. The system detected the multiple transfers from my Brazilian relatives and correctly identified that I was just under the reporting threshold, saving me unnecessary paperwork. It also provided documentation explaining exactly why I didn't need to file Form 3520 in my case, which I'm keeping for my records in case of any questions from the IRS. The analysis was much more thorough than what my tax preparer had provided, and it saved me about $350 in unnecessary preparation fees.

If you need to talk to someone at the IRS about Form 3520 requirements (which I definitely recommend), good luck getting through! I tried calling for two weeks about my foreign gift situation and couldn't get any human on the line. Finally used https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they got me connected to an IRS agent in about 20 minutes when I'd been trying for days on my own. The IRS agent confirmed exactly what I needed to report for gifts from my Japanese relatives and clarified that I didn't need to report certain educational expenses that were paid directly to my university. Totally worth it just for the peace of mind of hearing directly from the IRS instead of wondering if I was doing it right.

I need to eat my words about Claimyr. After posting my skeptical comment, I was still struggling to get through to the IRS about my Form 3520 question. Out of desperation, I tried the service and... it actually worked exactly as described. Their system navigated the IRS phone tree, waited on hold for 47 minutes (which I didn't have to sit through), and then connected me directly to an IRS representative. The agent helped clarify that in my situation (receiving multiple smaller gifts from foreign relatives that totaled over $100,000), I did need to file Form 3520, and explained exactly how to document the multiple transfers. This contradicted what my tax preparer had told me and potentially saved me from a significant penalty. I'm genuinely impressed and apologize for my skepticism.

Just an important note - make sure you distinguish between Form 3520 and Form 3520-A. They're different forms! Form 3520 is what you file for receiving foreign gifts over $100k like in your case. Form 3520-A is for reporting foreign trusts with US owners. I messed this up the first time and had to amend my return. Also, be aware that the deadline for Form 3520 is technically your tax return due date including extensions. So if you extend your tax return to October, your Form 3520 is also extended automatically.

Anyone know if there's a de minimis exception for small gifts throughout the year from the same foreign person? My parents send me like $500-$1000 every month from their accounts in Korea for help with my kids' expenses, and it'll add up to more than $100k for the year. Do I seriously need to file this special form for what's basically just family support?

I'm dealing with a similar situation and wanted to share what I learned from my research. Carmen, you definitely need to file Form 3520 since you received $130,000 from foreign persons (your parents) in 2024. The $100,000 threshold applies to the total amount received from ALL foreign persons combined in a single tax year. A few important points to keep in mind: - Form 3520 is due by April 15, 2025 (same as your tax return deadline) - It must be mailed separately - you cannot e-file it with your regular return - The penalties for not filing are severe (starting at $10,000), so definitely don't skip this - While you need to report the gift, you won't owe income tax on it since gifts from foreign individuals are generally not taxable to the recipient I'd recommend getting professional help with this form if you're unsure about any details, especially since the penalties are so high. Better to spend money on proper preparation than face potential penalties later!