Will My Wife's Savings be Taxed when Wire-Transferred into US?

[KayDeeCee 4,893]

~ Moved from DCF to Tax and Finances During US Immigration ~

[bob.sansmal 14]

It's a really Bad Idea to split transfers into smaller amounts to try to sneak under the $10,000 reporting requirement. This is illegal and it will be caught. They call it "structuring" and the IRS will take it. All of it. And at that point it won't matter if it was all legally obtained, trying to hide the transfers is all that will matter.

I could get on a soapbox on this topic, but I'll spare the readers here from my ranting as it wouldn't be completely on-topic here. :-)

I was told everything above 10000 dollars will be taxed, but maybe I was told wrong. it is better to transfer in smaller amounts within months.

I'm not an authority on this issue but generally anything over $10,000k will be scrutinized.

Would it be possible for you to start making deposits of a lesser amount at this time?

Personally it would worry me about transferring such a large amount of money after leaving the country.

I would think even cashiers checks might be a better alternative to a single wire transfer??

[Nich-Nick 3,354]

There is no tax. Anything over $10,000 is reported but not taxed. The banks or transfer company will do the reporting for you. They are required to. If you move $100,000 across town from bank A to Bank B, it is reported. The government wants a paper trail created so they can track money of suspected terrorism or money laundering.

Money going from an account in her name to an account in her name is not the same as $100,000 getting paid into her account by an unrelated person who happens to have the same name as a suspected terrorist or a huge transfer from a known South American drug cartel. You won't have to prove anything with receipts. If later she becomes a drug dealer, they can go back and say "Ahh, in 2016 you transferred $100k into the US so explain where the money came from". Just transfer the money, all at once, when she has a US account in her name.

Banks are charged with knowing their customers and asking for certain IDs when you open an account. They can ask questions of you about transfers if they want to, but it is not routine for the U.S. Treasury to super investigate every transaction and require precise documentation. My husband moved more than $20k from hIs UK bank to our US bank in February. It was seamless. No reports to the Feds or questions to answer. I recommend Transferwise.com for better exchange rates and lower fees than your bank will charge. The fees are not taxes.. Anybody handling a money transfer for you is going to charge you a fee for their service. That's how they make money. Find one that charges a smaller fee.

Edited April 21, 2016 by Nich-Nick

[templeton 120]

It's a really Bad Idea to split transfers into smaller amounts to try to sneak under the $10,000 reporting requirement. This is illegal and it will be caught. They call it "structuring" and the IRS will take it. All of it. And at that point it won't matter if it was all legally obtained, trying to hide the transfers is all that will matter.

This.

Stop giving advice when you have zero experience with tax laws and bank rules.

Definitely this. Some of the suggestions people are giving here - especially about transferring it in small amounts - are terrible advice which could lead to ALL of the money being seized.

There is no tax. Anything over $10,000 is reported but not taxed. The banks or transfer company will do the reporting for you. They are required to. If you move $100,000 across town from bank A to Bank B, it is reported. The government wants a paper trail created so they can track money of suspected terrorism or money laundering.

Money going from an account in her name to an account in her name is not the same as $100,000 getting paid into her account by an unrelated person who happens to have the same name as a suspected terrorist or a huge transfer from a known South American drug cartel. You won't have to prove anything with receipts. If later she becomes a drug dealer, they can go back and say "Ahh, in 2016 you transferred $100k into the US so explain where the money came from". Just transfer the money, all at once, when she has a US account in her name.

Banks are charged with knowing their customers and asking for certain IDs when you open an account. They can ask questions of you about transfers if they want to, but it is not routine for the U.S. Treasury to super investigate every transaction and require precise documentation. My husband moved more than $20k from hIs UK bank to our US bank in February. It was seamless. No reports to the Feds or questions to answer. I recommend Transferwise.com for better exchange rates and lower fees than your bank will charge. The fees are not taxes.. Anybody handling a money transfer for you is going to charge you a fee for their service. That's how they make money. Find one that charges a smaller fee.

Nich-Nick nailed it. Everything said here is accurate.

[cyclone27 710]

Only taxed on the future interest earned once accrued nothing on just transferring!

[Pte 0]

The feds caught former House Speaker Dennis Hastert paying hush money to a person he victimized during the 70's. Even though he paid the money in smaller amounts, the feds caught him and called it money structuring. He is now awaiting sentencing.

Thanks. You're right--these piece by piece transfers are shady (not to mention separate bank transfer fee for each transfer), and didn't cross my mind.

I recommend contacting the US bank you will be transferring the funds to. Ask them what they need from you before sending the funds. I'm unaware of any tax the US government will charge.

Don't recommend doing multiple small deposits, it will trigger a flag and the money can potentially be confiscated by the Feds.

Thanks. I contacted the bank. They said it is fine to transfer it all to them. However, they didn't know the answer regarding tax issues and advised me to contact the IRS or a tax attorney.

Once again.

The US will NOT tax the money.

The US will want proof that the money is clean.

Breaking it up into smaller amounts will just make it look more suspicious.

Contact a US bank on what is needed to transfer the money.

Stop giving advice when you have zero experience with tax laws and bank rules.

Thanks again.

Perhaps a call to a US tax attorney would be in order.

Thanks, I will try calling some US tax attorneys to see what they say and post their responses here.

[Will & Malou 0]

Have you found the answer from your US Tax Attorney?

[Pte 0]

Have you found the answer from your US Tax Attorney?

No, I haven't. If you (or anyone else) find the answer from a US Tax attorney (before I do), please share with us here.

Thanks!

[Nich-Nick 3,354]

There is no TAX to bring $500 or $5,000,000 to the US. None. Nada. Zero.

[Will & Malou 0]

Although it sounds so simple but heard so many stories of people being tax by the IRS. If it is that simple how do they catch the bad guys who wire the money for terrorist or drug money. Just worried about being tax. Is there anyone you can refer me to find that answer. I appreciate your reply and honesty..it's here hard earn money and just hate to see her get tax twice.

[Nich-Nick 3,354]

Although it sounds so simple but heard so many stories of people being tax by the IRS. If it is that simple how do they catch the bad guys who wire the money for terrorist or drug money. Just worried about being tax. Is there anyone you can refer me to find that answer. I appreciate your reply and honesty..it's here hard earn money and just hate to see her get tax twice.

If she has money to bring with her when she comes to the US, there is no tax on money she already had. I have seen your other posts now, and if she sold property after already being in the US and a permanent resident, then the question is not about bringing money she already had. It is an IRS question about the sale of property by a permanent resident. Go to IRS.gov and use the search box "Sale of property" to find tax topics. If she inherited after being in the US and a permanent resident, then go to IRS.gov and use the search box "Inheritance" to find tax topics.

Once a permanent resident, she follows US tax law when she gets new money by inheritance or sale of property. There are many scenarios of what is taxed and what might be excluded as an exception.. You have to read and find your situation because there is not one easy answer. That is different than bringing savings that was sitting in her bank account before immigrating, which is not taxed.

How do they catch the bad guys? Anything over $10,000 coming in gets reported to the U.S. Treasury. It's okay to bring it, but when they have investigated bad guys and built a case that it was used for criminal activity, they have a paper trail of money coming into the country and who sent it. Bad guys is the whole reason the reporting of large sums of money became part of the Patriot Act following 911. The report doesn't even go to IRS.

Understand that income tax (IRS) is on income you earn during a calendar year. You might earn money at a job, from interest or dividends paid on investments, selling stock or a house for profit. Let's say you have a savings account of $10,000. The IRS isn't going to tax you every year on $10,000 or if you change banks. And if an immigrant has a savings account of $10,000 that is theirs before they immigrate, the IRS isn't going to tax it as new earned income in 2016 just because they change banks from Phillipines to US. But think now your question may involve new money your wife got in 2016. So that will depend on when, how much, if there are exclusions, etc. It is specific and detailed about her. One easy answer will not fit all.

Edited July 20, 2016 by Nich-Nick

[Will & Malou 0]

Thank you for the information, this site is very helpful indeed. My wife had inherited the property and within the last year made an agreement with the buyer for installments of payment. The last payment will be done by the end of the year. She has already received money from the buyer before entering the US. Currently her money is in a bank in the Philippines and she wanted to wire it to a bank in the US. We just don't know what happens if she wires it. I am just asking if anyone had experience this sort of thing before.

[Nich-Nick 3,354]

Ok, here's an example I have. My husband received a cash inheritance from a British relative in 2015. He deposited it in his British bank account. I read volumes and volumes of information on IRS.gov and determined that due to the amount and nature of the inheritance it was not a taxable situation. It is extremely complicated to read and understand the IRS with so many situations covered under inheritance, many will require a tax accountant to do that for them. In your case, it was property which is another bunch of stuff. Did she make a profit or loss on the property? How does she determine the value? Furthermore she is receiving regular payments. See what I mean by each situation is different. My husband's was simple...cash in the bank.

So back to British inheritance. It had to be addressed when I did my 2015 tax return at the beginning of the year. tt was not something that was taxed so that part was done. End of tax discussion.

Totally different subject...getting some of the money to the US to help buy his new red sports car in 2016. We transferred using Transferwise. They charge a fee for their service but their fees and exchange rates are lower than banks for example.

So UK Bank >>>>3 days>>>>>US Bank>>>>buy car.

We report nothing. We just moved money. It was over $10,000 so somebody took care of the reporting but not us. I guess Transferwise reports or the receiving bank. That have reporting requirements according to the banking laws of the Patriot Act. The only time you the person reports money brought in is if you carry $10,000+ in your pocket. You fill out a report with the customs officer who sends it to the US Treasury.

So do you understand you have 2 issues

1). a tax issue to read about concerning inheritance and sale of property that would be worked out at tax filing time? Maybe you owe. Maybe not. I read for hours and figured mine out, but I am not going to read for hours and ask you 100 specific questions to figure yours out. That's why people pay tax accountants and I don't mean H&R Block. Even if you leave the money in the Phils, It is still a tax issue to figure out because she is now an American taxpayer and anything she has anywhere in the world counts. I doubt there is anybody on VJ that has your exact inheritance, exact amount, from the exact same relative for you to compare. So you have to take the concept here and do your personal situation.

2) And your separate issue is simply choosing how you want to get the money from there to here and when you want it.

[aaron2020 11,651]

http://www.visajourney.com/forums/topic/602960-does-my-wife-have-to-pay-tax-if-sending-money-from-the-philippines/

The US does not tax foreign inheritances. Never, ever when the deceased is not a USC, not an LPR, and has zero US properties.

The US does tax appreciations to inheritances when inherited property is sold. Gains or losses are treated as capital gains and loses. That's is what is taxed.

Your wife got $100,000. Stop being cheap and hire a tax attorney or an accountant.

You got free answers, but you want proof. Pay for it. Stop being cheap.

Signed,

Guy with an Advanced Tax Degree

Edited July 20, 2016 by aaron2020

[D.Ba 85]

Lots of illogical here on transferring money.

My bank for example does not allow transfers larger than 11,000 or so euros. I bet because they don't feel like reporting to the IRS. So, naturally I made several transfers of around 10,000 euros.

This has nothing to do with what that politician did! It is rather the same than carrying cash into the country: 10,000 and above needs to be registered, but naturally there is no tax. It is savings that have been taxed heftily when they were earned.

Did you all file an FBAR?