Sending more than $10,000 into my US bank account - Questions?

[grad_student 11]

I plan on sending more than $10,000 into my individual (not joint) personal bank account in USA from Pakistan. This is the money I have saved so far from my pay check. I will be transferring money from my bank account here to my bank account in USA via an online (SWIFT) transfer. I have tried looking for past threads but they are kinda old. And I would really appreciate if someone can answer couple of questions for me.

#1: I have read that sending more than $10,000 raises flags with IRS. I am wondering what kind of flags these are and would I be asked for some evidence such as source of funds by the IRS?

#2: Will I be required to pay taxes on this online transfer? I am not in USA currently and am not a USC either. Currently at NVC stage for IR-1/CR-1 spousal visa though.

Thanks

[aaron2020 11,651]

I plan on sending more than $10,000 into my individual (not joint) personal bank account in USA from Pakistan. This is the money I have saved so far from my pay check. I will be transferring money from my bank account here to my bank account in USA via an online (SWIFT) transfer. I have tried looking for past threads but they are kinda old. And I would really appreciate if someone can answer couple of questions for me.

#1: I have read that sending more than $10,000 raises flags with IRS. I am wondering what kind of flags these are and would I be asked for some evidence such as source of funds by the IRS? All transactions over $10,000 are reported to the IRS. You cannot break it up into several smaller transfers, this is illegal and is considered fraud. Google Dennis Hastert - he's a former US Congressman who got in trouble when the IRS investigated him breaking up a big withdrawal into smaller amounts to hid his transaction from the IRS. Don't follow his bad example. The IRS will want to make sure your money did not come from illegal activities. They US may ask for proof of the source of funds.

#2: Will I be required to pay taxes on this online transfer? No. You are not a USC or LPR. I am not in USA currently and am not a USC either. Currently at NVC stage for IR-1/CR-1 spousal visa though.

Thanks

[Ralph and Meghan 19]

transferred more then that when i moved to the states. Just inform IRS and you'll be fine.

[grad_student 11]

So will my bank here ask for a proof of funds while filling out the form to wire the money over to USA? Or will I get a request at the bank at a later date?

Also, my bank told me that it would take 3 business days to transfer money. I am assuming that would be the case when it is under $10k and not flagged by IRS. Wondering how long will it take if I send more than $10k and transaction is flagged by IRS?

[NexGen 8]

There are certain procedures which are automatically initiated by U.S. banks on all international wires. The IRS is just one of several agencies that are involved in the process. Do NOT under any circumstances attempt anything illegal such as structuring into smaller amounts to avoid scrutiny. The IRS will be the least of your problems. Law enforcement agencies will come down on you like a ton a bricks. Follow the appropriate procedures and provide whatever information the US bank requires to establish the legitimacy of the wire.

Edited September 11, 2015 by NexGen

[kovacs 20]

While there are horror stories of people being caught up in trouble, it is generally not a big deal. Especially if it is a single transfer. One big transfer will raise fewer flags than several $11,000 transfers.
But several $9,000 transfers will ruin your life. As said above, don't do that!

[Ontarkie 14,221]

~~Moved To Tax & Finances, From USC Discussion - As the question is not about Citizenship and is about money transfers and taxes.~~

[grad_student 11]

So suppose if I was a USC or LPR, would the wire transfer of more than $10,000 be taxed by IRS?

[aaron2020 11,651]

So suppose if I was a USC or LPR, would the wire transfer of more than $10,000 be taxed by IRS?

If there was a profit, then yes. It's not that it will be taxed. It's that it may be taxed for USC and LPR based on status. Most counties tax based on where money is earned. US is one of few countries that taxes based on status.

[grad_student 11]

If there was a profit, then yes. It's not that it will be taxed. It's that it may be taxed for USC and LPR based on status. Most counties tax based on where money is earned. US is one of few countries that taxes based on status.

I understand that US taxes based on status.

Sorry I dont understand waht you said up there. So suppose we sell our family house (or some other asset) outside of USA and I want to bring my share of the sale proceeds of the asset in to USA via back transfer, will that be taxed or not assuming I am USC at the time of transferring funds?

Edited September 12, 2015 by grad_student

[kovacs 20]

I sold a home in Jersey (UK) about 6 years ago. I don't remember all of the details, but when I reported the profit in April to the IRS there were no taxes due on the capital gain. I think there is a general "allowance" of $500,000. As long as the "profit" is below that, nothing is due.

I understand that US taxes based on status.

Sorry I dont understand waht you said up there. So suppose we sell our family house (or some other asset) outside of USA and I want to bring my share of the sale proceeds of the asset in to USA via back transfer, will that be taxed or not assuming I am USC at the time of transferring funds?

[aaron2020 11,651]

I understand that US taxes based on status.

Sorry I dont understand waht you said up there. So suppose we sell our family house (or some other asset) outside of USA and I want to bring my share of the sale proceeds of the asset in to USA via back transfer, will that be taxed or not assuming I am USC at the time of transferring funds?

US taxes are complex. A primary residence gets special tax treatment.

As a USC or LPR, you would be required to report your share of the profits from the sale of the family home on your tax return. It doesn't matter if you transfer the profits to the US or leave it abroad. You are required to report the profits because a USC or LPR is required to report his worldwide income. The profits are taxable unless you qualify for the homeowner exemption which is what Kovacs the "allowance of $500,000." (It's up to $500,000 if you are married and meet all the requirements. It could be zero if you do not meet the requirements.)

Transferring the money to the US is not a taxable event. It's the original time when the sale occurred and a profit was made that triggers a taxable event.

[kovacs 20]

Thanks for the clear description, aaron2020!

[NexGen 8]

I understand that US taxes based on status.

Sorry I dont understand waht you said up there. So suppose we sell our family house (or some other asset) outside of USA and I want to bring my share of the sale proceeds of the asset in to USA via back transfer, will that be taxed or not assuming I am USC at the time of transferring funds?

Most types of income earned legally by a USC, whether from domestic or foreign sources, is taxable by the US govt. The exceptions are very few. This is why about 1,000 natural born USC residing overseas permanently are said to relinquish their US citizenship every year; they don't want to be taxed twice.

Most of the Bush tax cuts have since expired but there are still special provisions available for people who are selling their primary residence provided you meet certain conditions prior to the sale. You can also elect to defer payment of the capital gain up to a certain period. The US tax code is one of the most complicated pieces of legislation and I suggest you contact a good tax professional in the U.S. if you want to understand how to manage your tax liability.

[Adil & Jeanne 296]

Actually after 9/11 it went to $4999

It will be taxed as you are married to US citizen and your spouse has to include the amount on her taxes. Spouse needs to add you to IRS tax returns in the spring if spouse has not already added you and asked for ITIN in the past. BTW adding you to tax returns shows co-mingling of funds and accounts and helps in the process for visa (but can only be done during tax season)