Money from abroad and accounts abroad: gifts, remittances and FBAR
A gift from family overseas is not income, but a large one has to be reported. So does a foreign bank account once the combined balance passes the threshold.
Quick answers
- Is money my family sends me from abroad taxable?
- Generally no. A gift or an inheritance is not income to whoever receives it. Once that money starts earning interest or rent, though, the earnings are taxable to you.
- Do I have to report a large gift from overseas?
- If what one foreign person gave you passes the year's threshold, yes, on Form 3520. That form goes in on its own rather than traveling with your income tax return.
- Do I have to report my bank account back home?
- If your foreign accounts together passed the threshold at any point in the year, yes. The report goes to the Financial Crimes Enforcement Network, not with your tax return.
Cash from relatives overseas is generally not taxed to you, and cash you send them is generally not deductible. Reporting is a separate question from tax, and there are two separate reports.
A gift is not income
Gifts, bequests and inheritances you receive are usually left out of your income altogether. A transfer from your parents toward a down payment is not wages, not interest, and not something the return picks up, however large it is. One qualifier rides along with the rule: once the property starts earning, whether that is interest, dividends or rent, the earnings are taxable to you. The down payment is not taxed. What the money earns while it sits in your account is.
Money going the other way is a shorter rule. Handing money to someone, or leaving an estate to your heirs, does not normally change your federal income tax, and the value of what you give away is not deductible unless the gift is a deductible charitable contribution. Remittances home to support family sit inside that sentence.
The large-gift report
Not taxable and not reportable are different findings. A large gift or bequest reaching a United States person from a foreign person belongs on Part IV of Form 3520, due by the fifteenth day of the fourth month that follows the close of your income tax year, and pushed back by any extension of time to file you are entitled to.
Two triggers apply, and their amounts are nothing like each other.
- From a nonresident alien individual or a foreign estate, the report is due only where what reached you during the taxable year from that person, plus anything from foreign persons you know of, or ought reasonably to know of, as related to them, comes to more than $100,000. Once you are over that line, each separate gift larger than $5,000 has to be identified individually on the form.
- From a foreign corporation or a foreign partnership, a purported gift sets off the report at a far lower aggregate, and the amount is adjusted for inflation each year: $20,116 for 2025, and $20,573 for 2026.
Two mechanics decide whether this goes smoothly. Form 3520 does not travel with your income tax return; it goes in on its own, following its own instructions, so return software will not quietly attach it for you. And sending it late, or sending it with information that is incomplete or wrong, can draw a penalty unless you had reasonable cause.
The account report
The second report has nothing to do with gifts and everything to do with balances. Hold a financial interest in accounts outside the country, or signature or other authority over them, and an FBAR falls due once their combined value topped $10,000 at any point in the calendar year.
Two things get missed here. What matters is every foreign account added together, not the balance sitting in any one of them, so a handful of modest accounts can cross the line jointly. And it is irrelevant whether an account earned anything taxable: a dormant account counts exactly as a productive one does.
The mechanics differ as well. An FBAR is FinCEN Form 114, and FinCEN is not the IRS. Individuals send it electronically through the BSA E-Filing System instead of attaching it to a return. It covers a calendar year and falls due on April 15 afterwards, with an extension to October 15 that arrives automatically and never has to be asked for.
What is not reportable, and who is exempt
Several kinds of account stay outside it. An account inside an individual retirement arrangement that you own or benefit from is not reportable. Neither is an account inside a retirement plan where you are a participant or a beneficiary, nor one owned by a governmental entity, and the published list runs longer than those three.
Married readers have an exception of their own, with three parts that all have to be true at once. Every foreign account you hold has to be held jointly with your spouse. You have to have completed and signed FinCEN Form 114a, which is what lets your spouse file for you. And your spouse's own FBAR, signed and filed on time, has to report those joint accounts. How you file your income tax return is beside the point here: joint or separate changes nothing.
Two reports, two thresholds, two places
The two blur together easily, and they are not connected. One of them measures what came to you during a year, and it is filed with the IRS on Form 3520. The other measures what sits in your accounts, and it is filed with the Financial Crimes Enforcement Network on Form 114. Neither one is a tax, and crossing either threshold tells you nothing about the other.
What this article does not cover, and when to get help
Money you earn abroad, a pension paid from abroad, a business you own abroad, and the separate reporting of specified foreign financial assets on Form 8938 all sit outside this article. If what you hold overseas is more than an ordinary personal bank account, or you have worked out that a year went unreported, take it to a preparer whose practice covers international returns, rather than filing something on a guess. Filing with an ITIN covers the identification number a return needs, and your first year on a visa covers whether you count as a resident for tax purposes to begin with.