Gift Tax from overseas transaction?

Indiana

Hi all,

My wife and I will most likely be receiving a large sum of money from her family in Japan for the purpose of buying a new home. After weighing his options, my father-in-law seems to think that gifting this, although painful, will probably be the best way of transferring the funds. (as an alternative to buying the house himself and putting the title in his name)

If her father transfers the money to an account in her name in Japan, this should initiate the gift tax in Japan. If this money is then wire transfered from an account in my wives name in Japan, to our account here in the US. Is there anything we have to do, or owe to the IRS? We wouldn't be responsible for a gift tax or some other tax over here, would we?

Thanks!

If you receive more than $105,000 from a foreign source gift, you must report it to the IRS on Form 3520. You only fill out pages 1 & 6. Should take you about 20 minutes. You do not have to pay any tax on the gift if you report it properly.

Thank you!