International gift reporting question for Form 3520 - does community property affect foreign gift rules?

The reporting requirements for Form 3520 are based on who is making the gift, regardless of community property laws. Since your mother is a non-US person, a gift from her over the reporting threshold (currently $100,000 from foreign individuals for 2025) would generally trigger the Form 3520 filing requirement. However, your situation has a twist because of the community property factor. The IRS generally respects community property laws, which means technically half of your mother's gift could be considered as coming from your US citizen father. That said, the safest approach would be to file Form 3520 for any portion clearly attributable to your non-US mother. In practice, this means you might need to report the portion of the gift considered to be from your mother (potentially half of the total amount under community property laws) if that amount exceeds the threshold.

I had an almost identical situation last year with my parents (mom is British, dad is American, living in Mexico). When I consulted with multiple accountants, they had different opinions until I used https://taxr.ai to upload all my documents and get a clear answer. They analyzed the specific community property laws of Mexico and how they interact with US gift tax reporting requirements. The tool confirmed that I didn't need to file Form 3520 since the portion attributable to my foreign parent was under the threshold. I saved a ton of time and stress by getting this clarified properly instead of filing an unnecessary form or risking penalties for not filing.

I want to follow up about my experience with taxr.ai after trying it for my international gift situation. I was initially just curious but decided to give it a shot with my complicated scenario (German parent gifting to me while living with my American parent in Switzerland). The analysis I received was surprisingly detailed - they broke down exactly how Swiss community property laws interact with US reporting requirements and cited specific IRS rulings I hadn't found in my own research. The service saved me from filing an unnecessary Form 3520 that my previous accountant had insisted I needed. The best part was getting a clear, definitive answer with the legal reasoning behind it that I could actually understand. Wish I'd known about this before spending hours down internet rabbit holes trying to figure this out myself!

After dealing with international gift reporting issues for years, I finally discovered https://claimyr.com when I needed to speak directly with someone at the IRS about my Form 3520 questions. If you've ever tried calling the IRS international tax line, you know it's basically impossible to get through. Claimyr held my place in the phone queue and called me when an actual IRS agent was on the line. Check out how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that in community property situations, they generally respect the division of assets according to local law, but documentation is key. Getting this straight from an IRS representative saved me from potentially making a costly reporting mistake.

I need to apologize and share that I actually tried Claimyr after posting my skeptical comment. I was absolutely wrong and it's 100% legitimate. After months of failing to get through to the IRS about my international gift reporting question, I was connected to an agent in about 47 minutes (without having to actually sit by my phone the whole time). The IRS agent I spoke with gave me clear guidance on my specific Form 3520 situation with gifts from a relative in Germany. The agent confirmed that in community property jurisdictions, they do look at local law but proper documentation is crucial. She also mentioned that the determination can get complicated if the source of funds matters (like if it was inheritance or separate property). Honestly wish I hadn't wasted so much time being stubborn and trying to do it all myself. Will definitely use this service again for my next inevitable tax confusion.

Just wanted to add something that hasn't been mentioned yet - make sure you understand the source of the funds your mom is gifting you. If the money came solely from her separate property (like an inheritance she received or assets she owned before marriage), it might be treated differently than community property despite being in a community property country. In my experience with Spanish community property laws specifically, there are exceptions to what's considered community property. If this money is definitely your mom's separate property under local law, you might still need to file Form 3520 regardless of your dad's US status.

Has anyone actually gotten penalized for NOT filing a F3520 in similar circumstances? I'm in a similar situation and my tax guy says the penalty is like $10k minimum which seems insane for just missing a form when no actual tax is owed???