Non-US resident - Do I need to pay gift tax on $100K from my parents in Vietnam?

I've been living in the US for about 6 years now and have filed taxes every year since arriving. Started on an F1 student visa and now working with company sponsorship. My green card should be approved sometime next year if everything goes well. My situation is that my parents in Vietnam are planning to send me around $100,000 as a gift. I'm thinking of putting this money into a CD account to earn some interest. I understand I'll need to pay taxes on the interest income from the CD each year, but what I'm really confused about is whether I need to pay any tax on the actual $100K gift amount itself? Since this is coming from my parents who are in Vietnam (not US citizens or residents), are there different rules that apply? Do foreign gifts get taxed differently? I don't want to make any mistakes on my taxes since my immigration status is still in process. Thanks for any advice you can provide!

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18 comments

AstroAlpha

•8M

Good news! Recipients of gifts don't pay tax on the gift itself - the gift giver would be responsible for any gift tax. In your case, since your parents are not US citizens or residents, they wouldn't be subject to US gift tax laws for gifts made from outside the US. However, you DO need to report this gift on Form 3520 (Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts) because it exceeds $100,000 from foreign persons. Failure to file this form can result in penalties, so don't skip this step! This is just an informational form - it doesn't mean you owe tax on the gift. And you're correct that you'll need to pay income tax on any interest earned from the CD. That interest will be reported on your regular tax return (Form 1040) as interest income.

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AstroAlpha

•8M

For gifts from foreign individuals, you only need to file Form 3520 if the total exceeds $100,000 from all foreign persons combined in a single tax year. So with $50k, you wouldn't need to file Form 3520 unless you receive additional foreign gifts that push you over the $100k threshold. The Form 3520 is due on the same date as your regular income tax return, including extensions. So if you file by April 15th, your Form 3520 would be due then too. If you extend your tax return, the Form 3520 deadline extends as well.

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Anastasia Smirnova

•8M

After struggling with almost the exact same situation (parents in Malaysia sending me money for a house down payment), I found this amazing tool at https://taxr.ai that was a lifesaver. I uploaded my bank statements showing the gift transfers and it immediately flagged that I needed to file the Form 3520 for foreign gifts over $100k. It even helped me understand exactly how to fill it out correctly - which was way less stressful than trying to figure it out myself. The system analyzed my documents and explained all the reporting requirements in really simple terms. What I really appreciated was that it confirmed I wouldn't owe any actual tax on the gift itself, just needed to report it. Saved me from potentially missing this form and getting hit with penalties!

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Anastasia Smirnova

•8M

Yes, it absolutely works for business transactions too! I have a friend who uses it for his consulting business that gets payments from international clients. The system is designed to analyze all kinds of financial documents and identify the tax implications, including for business transactions like your supplier rebates. It'll tell you whether they count as income or something else. I was skeptical at first too, but the analysis it provides includes citations to specific IRS rules and regulations. I actually did take the results to my accountant who confirmed everything was correct. The nice thing is it saved me from paying the accountant to figure it all out from scratch - I just needed them to verify what taxr.ai had already told me.

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Zara Shah

•8M

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Luca Bianchi

•8M

After dealing with a similar foreign gift situation, I spent WEEKS trying to call the IRS to confirm whether I needed to file anything special. Couldn't get through to anyone who could actually answer my question. Then I found https://claimyr.com and their video explanation here: https://youtu.be/_kiP6q8DX5c - it's a service that gets you through to an actual IRS agent quickly instead of waiting on hold for hours. Used it and got connected to an IRS specialist in about 20 minutes who confirmed exactly what forms I needed for my foreign gift (Form 3520) and answered all my questions about deadlines and potential penalties. This was after I'd already wasted days trying to get through on my own. They basically hold your place in the IRS phone queue so you don't have to listen to that terrible hold music for hours.

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Luca Bianchi

•8M

There's no special connection or cutting in line - they use technology to wait on hold for you. When you use their service, they call the IRS and navigate the phone tree to get to the right department, then wait in the queue. When they finally reach an agent, they connect the call to your phone. So you're still "waiting" the same amount of time, but you don't have to physically be on hold the whole time. I was definitely skeptical too at first! But it's not a scam - they never ask for any tax info or personal details beyond your phone number to connect the call. You're speaking directly with actual IRS agents through the official IRS phone system. The service just handles the frustrating waiting part. I was able to verify I was really talking to the IRS, and the information they provided matched exactly what my tax preparer later told me.

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Zara Shah

•8M

I need to admit I was completely wrong about Claimyr. After dismissing it as a scam, I was still struggling to get through to the IRS about my foreign gift reporting requirements. Out of desperation, I decided to try it - figuring I could always dispute the charge if it was fake. To my surprise, I got a call back in about 25 minutes with an actual IRS representative on the line! They answered all my questions about Form 3520 and confirmed I was handling my foreign gift correctly. The agent even explained the penalties for late filing (which are steep - starting at $10,000!) and gave me tips for making sure my form was processed correctly. Definitely saved me from potential headaches and possibly huge penalties. I've been telling everyone in my international student group about this service now.

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Nia Harris

•8M

Definitely tell your parents not to split it up! You're right that it could look like structuring, which can trigger all kinds of unwanted scrutiny from both banks and the government. Regarding Vietnam specifically, your parents will likely need to complete forms at their Vietnamese bank explaining the purpose of the transfer and possibly showing documentation of the source of funds. Vietnam has currency control regulations, and for amounts over about $5,000 USD, there are usually additional verification steps. The exact requirements vary by bank, but generally they'll need to provide your information, their relationship to you, and sometimes proof of how they acquired the money (especially for large amounts like $100k). Their bank in Vietnam will guide them through their specific requirements.

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Mateo Gonzalez

•8M

One other thing to consider - depending on what state you live in, you might want to check if there are any state-level reporting requirements for large gifts. Most states don't have gift taxes, but a few still do. Also, keep good records of this transaction for your green card process. While legitimate gifts from parents won't negatively impact your application, having clear documentation of the source of funds is always helpful when your finances are reviewed during immigration processes.

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